Click here to get Archive of Weekly News
Weekly News – Week of February 8, 2010.
Bankruptcy did not relieve plan administrator of reporting duties under ERISA
The plan administrator of a 401(k) plan was ordered by an Administrative Law Judge to pay the $86,500 penalty assessed by EBSA for violating the annual reporting requirements under ERISA.
The administrator appealed EBSA’s civil penalty assessment for violating ERISA by failing to file a complete and accurate Form 5500 for the 2004 plan year. The report was rejected because the administrator failed to attach an acceptable independent qualified accountant’s opinion and a schedule of assets held for investments.
The court found that the administrator’s bankruptcy did not relieve the administrator of its duties and that it deliberately elected to sell its business locations without preserving the plan records as required by ERISA. According to the decision, compliance with the annual reporting requirements alone preserves the intention of ERISA, which is to protect the rights of the employees whose money is being held by the plan. The administrator’s excuse and apologies for why it failed to maintain records and file a compliant report cannot substitute for that protection, the Administrative Law Judge ruled.
Labor Department news release, January 15, 2010.
