According to the announcement, the SVF is a collective trust, administrated by CTC and for which CTC serves as trustee. Approximately $200 million from 1,500 pension plans nationwide is invested in the SVF. “The company’s actions have jeopardized millions of dollars in workers retirement benefits,” US Secretary of Labor Elaine Chao said in the release.
According to the DoL suit, from July 1999 until the present, CTC violated ERISA by, among other things, causing SVF to invest in a number of speculative and imprudent investments recommended by Trust Advisors, LLC, a Westport, CT-based investment advisor to the SVF from March 1998 through Oct. 31, 2003, which resulted in millions of dollars in losses to the trust fund. On Sept. 30, an independent fiduciary appointed on behalf of SVF filed a petition seeking bankruptcy protection for the SVF, and the Connecticut Banking Commissioner was appointed as the receiver of CTC.
The DoL filed suit in the US District Court for the District of Connecticut seeking to permanently bar CTC from serving as fiduciary to any employee benefit plan covered by ERISA. The suit also seeks reimbursement to SVP for all losses, with interest, resulting from the fiduciary breaches of CTC.