A court decision has shown that fiduciaries who failed to fulfill their obligations to participants in an IRA plan aren’t getting off the hook via a bankruptcy filing.
The Department of Labor took Scott Louis Slocum and the Dalton Mechanical SIMPLE IRA Plan to court back in 2009 after an investigation by the Employee Benefits Security Administration found that plan trustees, including Slocum and Dalton Mechanical, Inc., failed to ensure employee contributions were remitted to the plan as required by ERISA. The total amount due to the plan participants, including lost interest, was determined to be $41,093.44.
The company, Dalton Mechanical Services Inc., is a now-defunct HVAC contractor formerly located in Clarks Summit, Pennsylvania.
On May 12, 2011, there was a consent judgment, and initially Slocum made payments to the plan as the judgment required. However, subsequently he fell into default with late and missed payments.
The judgment had provided that if Slocum filed for bankruptcy prior to the full restitution to the plan, he would not oppose the Secretary of Labor having the debt to the plan declared non-dischargeable. On August 24, 2015, Slocum filed chapter 7 bankruptcy, and the department filed the adversary action complaint in this matter on December 1, 2015.
On March 25 of this year, a default was entered, and on April 4, the bankruptcy judge issued a judgment by default that said in part that “the debt owed by debtor by way of a Consent Judgment in The Middle District Of Pennsylvania to repay unremitted employee contributions to the Dalton Mechanical Simple IRA Plan, as more fully set forth in the underlying above captioned complaint is hereby declared non-dischargable…”
The total outstanding amount is $28,180.64.
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
