DoL Sues Union Plan Trustee for Abandoning Benefit Fund

July 9, 2004 ( - The US Department of Labor (DoL) has sued Local 19 of the Bakery, Confectionery, Tobacco Workers and Grain Millers Union and the trustees of the ABC Local No. 12 Employer and Employee Life Benefit Fund for abandoning the fund.

>In the suit, the DOL alleges trustees Myron Rodzay, Agostino Corso, Randy Cellone and James Gallicic failed to perform their duties as plan fiduciaries under the Employee Retirement Income Security Act (ERISA) from 1999 to the present.   The DoL contends that, as a result of their improper actions, the fiduciaries abandoned the fund, according to a news release.

>Because of this action, the DoL said the fund now faces bills that are unpaid, beneficiary claims that are not processed, and money owed to the plan that is not being deposited. Plans become “orphan plans” when they are abandoned by all fiduciaries designated to manage and operate them and their assets.

>Additionally, the DoL filed suit against a former employee of the plan for unauthorized use of plan assets.   The DoL alleges that employee Marilyn Constable has been illegally in control of plan assets without directions from the trustees and may have used plan money for her personal use.

>The department’s suit seeks court approval to appoint David Lipkin, of Metro Benefits, as the fund’s independent fiduciary to replace the trustees who abandoned the fund.   The DoL also is asking the court for the restoration of any losses incurred by the fund.

The fund provides death benefits to beneficiaries of members of the former Local 12 Bakery, Confectionery, Tobacco Workers and Grain Millers Union.   Local 19 was charged as a successor fiduciary after its merger with Local 12 in March 2004.