According to the filing, in the U.S. District Court for the Middle District of Florida, the defendants caused or allowed 32 loans totaling $2,532,000 to be made from the plan to the company between July 1998 and September 2004.
The agency charged the fiduciaries with several breaches of their fiduciary duties under the Employee Retirement Income Security Act (ERISA), including violations of the “prudent man rule” and failing to operate the plan in accordance with the plan document.
In addition, the complaint said the fiduciaries of the Traylor Chemical & Supply Company Employees’ Profit Sharing Plan and Trust failed to monitor, control, or attempt to rectify each others’ indiscretions against the plan. The complaint also charged that the defendants failed to ensure the assets of the plan were held in trust.
The suit seeks restoration of the total amount of the loans to the plan, in addition to lost earnings and lost opportunity costs. The agency also asked the court to order the fiduciaries from engaging in any further violations of ERISA.
Another recent action involving the transfer of plan assets for the company’s benefit addressed the issue of whether lost opportunity costs could be assumed or known (See DoL Loses Effort to Recoup Plan’s ‘Lost Opportunity Costs’ ).