By Pension and Benefits Editorial Staff
The U.S. District Court for the Eastern District of Virginia has issued a default judgment requiring defendants JWK Corp., its chief executive officer and the director of operations to restore $103,098 to the 401(k) defined contribution plan of the Annandale, Virginia-based engineering services company.
The action follows a U.S. Department of Labor Employee Benefits Security Administration (EBSA) investigation that found – from July 15, 2013 to Sept. 30, 2016 – fiduciaries JWK Corp., CEO Jay Khim and Director of Operations Scott Phillips, violated the Employee Retirement Income Security Act (ERISA) when they withheld employee loan repayments, and failed to remit them to the company's 401(k) Salary Savings Plan.
The default judgment requires the defendants to restore $86,315 to the plan, plus $16,782.80 in interest on the unremitted loan repayments. The judgment also removes the defendants as plan fiduciaries and appoints an independent fiduciary to terminate the plan and distribute the plan's assets to the 25 participants. In addition, it permanently enjoins the defendants from serving as fiduciaries to any ERISA-covered plan.
“Fiduciaries must work solely in the interest of plans and participants. When they fail to do so, they jeopardize the financial security of workers, which we will not tolerate,” said Employee Benefits Security Administration Regional Director Michael Schloss, in Philadelphia, Pennsylvania.
“The U.S. Department of Labor took this legal action to ensure the proper administration of the plan and secure the participants' access to their hard-earned retirement funds,” said Regional Solicitor Oscar L. Hampton III, in Philadelphia.
EBSA's Washington, D.C., district office investigated, and the Regional Solicitor in Philadelphia litigated, on the department's behalf.
Source: DOL News Release, No. 20-476-PHI.
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