The U.S. Department of Labor has sued Sun Control Systems Inc., the estate of former company President John Buckingham Sr., and current President Thomas Buckingham, to restore assets to the company's three employee benefit plans.
The suit was filed after an Employee Benefits Security Administration investigation that revealed alleged violations of the Employee Retirement Income Security Act.
The suit alleges that from December 2007 through August 2010, the defendants permitted a series of transfers from the accounts of two profit-sharing plans and one 401(k) plan to satisfy corporate debt. Additionally, it is alleged that between January 2006 and November 2010, the defendants failed to remit employee contributions to the 401(k) plan and remitted certain contributions late, resulting in lost interest.
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"These violations represent a clear breach of fiduciary duty," said Marc Machiz, regional director of the EBSA in Philadelphia. "Employees should expect that their hard-earned savings will be properly managed when they contribute to retirement plans."
Filed in the U.S. District Court for the District of Maryland, the suit seeks to restore to the plan all losses, including interest and opportunity costs. The suit also seeks to permanently bar the defendants from serving in a fiduciary capacity to any employee benefit plan covered by ERISA and to appoint an independent fiduciary to manage the plans.
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