Wednesday, December 16, 2009

DOL Sues Connecticut Company for Failing to Remit 401(k) Contributions

The U.S. Department of Labor ("DOL") has sued Manchester Moving and Storage Inc., a Manchester, Connecticut based company, as well as company president Frank N. Serignese for alleged misuse of more than $36,000 belonging to the employees of the company's 401(k) plan. The lawsuit, filed in the federal court in Connecticut, alleges that Serignese and the company violated ERISA by failing to remit to the plan employee contributions and participant loan repayments. The company was the plan sponsor and plan administrator, while Serignese served as the plan's trustee. Both were fiduciaries to the plan with responsibility for collecting money and property owed to the plan, which was funded primarily through contributions withheld from employee paychecks. The DOL's suit alleges that the defendants collected and used for the benefit of the company $31,709.94 in employee contributions and $4,318.21 in loan repayments belonging to the plan.