Compliance June 26, 2012

DOL Sues LifeCare of Alabama

June 26, 2012 (PLANSPONSOR.com) – The Department of Labor (DOL) is suing a private ambulance service and its CEO for allegedly mishandling retirement funds.
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The DOL alleges that Hartselle-based LifeCare of Alabama Inc. and Susan Clingman-Banks violated provisions of the Employee Retirement Income Security Act (ERISA) by failing to forward employee contributions to the company’s 401(k) plan in a timely manner, according to CBS News. The suit seeks to restore more than $112,000 in assets.

The lawsuit is seeking to use Clingman-Banks’ individual account to offset plan losses, bar the defendants from serving as fiduciaries of any ERISA plan and appoint an independent fiduciary to administer the plan.

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The Employee Benefits Security Administration’s (EBSA) Atlanta Regional Office found that between October 2008 and March 2010, the defendants did forward $112,354.91 of employee contributions to the plan in a timely manner. Between September 2005 and September 2008, the defendants did not forward $105,586.09 of employee contributions to the plan.

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