The U.S. Department of Labor has filed suit against International Paper Box Machine Company Inc., of Nashua, New Hampshire, alleging violations of the federal law protecting employee pension and benefit plans.
The lawsuit also names IPBM president Hugh McAdam and his wife, Theresa McAdam, the company's executive vice-president, in the alleged violations of the Employee Retirement Income Security Act (ERISA).
The suit was filed April 9 in U.S. District Court for the District of New Hampshire, according to James Benages, Boston regional director for the department's Pension and Welfare Benefits Administration.
The suit states that since January 1, 2000, IPBM administered the International Paper Box Machine Company, Inc. Salary Deferral Retirement Plan and Trust, a 401(k) plan into which participating workers make contributions through payroll deductions. The plan requires IPBM to forward the employees' funds to the plan. The suit alleges IPBM failed to forward at least $202,850.05 in employee contributions, as well as $56,307.08 in amounts employees had withheld from their paychecks to repay loans they took from their 401(k) accounts.
By allowing IPBM to deduct the contributions and loan repayments from employee paychecks without forwarding them to the plan, the suit alleges the McAdams failed in their duties as plan trustees and fiduciaries.
Finally, the suit notes that the plan required IPBM to make certain matching contributions to employee 401(k) accounts. It alleges IPBM failed to contribute at least $87,486.54 in matching funds, and that the McAdams failed to take appropriate measures to make sure the matching contributions were made.
Benages stressed that ERISA requires that employee benefit plan assets be administered solely for the benefit of the plan's participants. He noted that the department's lawsuit seeks a court order permanently enjoining the defendants from future violations of ERISA, and requiring them to restore to the plan all losses that resulted from their violations of the law, plus interest.
