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March 07, 2001
DOL Suing Company for Pension Violations
The Avcon, Inc. 401(k) Plan, an employee benefit plan, was named as a defendant in the suit, which was filed Feb. 22 in U.S. District Court for the Central District of California.
The alleged violations of ERISA occurred when Avcon and John N. Cowles, the company's former CFO, failed to forward contributions withheld from employee paychecks to the plan from Nov. 27, 1997, to May 22, 1998, according to Billy Beaver, Los Angeles regional director for the labor department's Pension and Welfare Benefits Administration (PWBA). Avcon and Cowles are also alleged to have delayed the forwarding of employee contributions to the plan from March 6, 1996 to May 22, 1998.
"This case exemplifies our commitment to protect the hard-earned benefits of workers," Beaver said.
The complaint contends that Cowles, as CFO of Avcon, handled the forwarding of employee contributions to the plan, including withholding contributions from employee paychecks and deciding when, and if, to forward those contributions to the plan. Cowles is identified in the complaint as the person who exercised all of the discretionary authority for the administration of the plan on behalf of Avcon.
The suit asks the court to require Avcon and Cowles to make full restitution of all losses suffered by the plan and to require the plan to set off Cowles' individual plan account against the losses caused by the alleged misconduct. It also seeks to remove Avcon as plan administrator and named fiduciary; to remove Cowles as plan trustee and named fiduciary; to appoint an independent fiduciary to make distributions to the plan's participants; to require Cowles and Avcon to pay for all costs associated with the appointment and retention of the independent fiduciary; and to bar Cowles permanently from serving as a fiduciary of or service provider to any employee benefit plan subject to ERISA.
The court action was a result of an investigation conducted by the Los Angeles Regional Office of PWBA, headed by Beaver, and is part of an ongoing initiative to ensure compliance with ERISA fiduciary standards with respect to timely deposit of employees' contributions to 401(k) plans.
ANGELES - The U.S. Department of Labor (DOL) has filed suit against Avcon Inc., a California-based Delaware corporation, and its former chief financial officer for violations of the Employee Retirement Income Security Act (ERISA).