Archived News Release — Caution: Information may be out of date.
Washington, DC - On Oct. 16, 2001, the U.S. Department of Labor obtained a consent order requiring the trustees of the National Electrical Benefit Fund in Rockville, Maryland, to pay $4.95 million to the fund as restitution for making an imprudent loan of pension assets and an imprudent purchase of shares in a limited partnership in 1992 and 1993.
This restitution will resolve the department’s lawsuit and will return money to pay promised retirement benefits.
On May 5, 1999, the department sued the trustees for imprudently loaning plan assets to Columbia Land and Development Corporation to acquire and develop land in Orlando, Florida, known as Country Run. The department alleged that the trustees should have known that the loan could not be repaid in full with interest.
“This aggressive settlement is part of our commitment to crack down on pension fund abuses by union and management officials. We will do everything in our power to protect union members’ pensions from being preyed upon and misspent,” said Labor Secretary Elaine L. Chao.
The fund is a collectively bargained defined benefit pension plan funded by contributions of participating employers. As of Dec. 31, 1999, the fund covered over 440,000 union workers with approximately $9.2 billion in assets.
The consent order, entered in federal district court in Greenbelt, Maryland, resulted from an investigation conducted by the Washington District Office of the Philadelphia Regional Office of the Pension and Welfare Benefits Administration into alleged violations of the Employee Retirement Income Security Act.
(Chao v. Moore Civil Action No. AW-99-1283) U.S. Department of Labor news releases are accessible on the Internet. The information in this news release will be made available in alternate format upon request (large print, Braille, audio tape or disc) from the Central Office for Assistive Services and Technology. Please specify which news release when placing your request. Call 202.693.7773 or TTY 202.693.7775.
Archived News Release — Caution: Information may be out of date.
