Archived News Release — Caution: Information may be out of date.
Atlanta, Georgia - The owner of Wade & Sons, Inc. in Macon, Georgia, agreed to repay $142,954 to the company’s profit sharing plan and to the appointment of an independent fiduciary to manage the plan, according to a consent order and judgment obtained by the U.S. Department of Labor on Feb. 11, 2003.
Under the judgment, Larry Lefoldt of Lefoldt & Company in Jackson, Mississippi, was appointed as the successor trustee and given authority to terminate the plan and distribute the assets to all participants and beneficiaries except defendant George Phelps Wade. The court removed Wade as the plan’s sole trustee.
The judgment resolves a lawsuit filed on Dec. 12, 2002, against the company and Wade for violating the Employee Retirement Income Security (ERISA) by making $168,600 in loans that benefited the employer. The loans were made between Jan. 17, 1991 and Sept. 18, 1997. The defendants repaid $22,000 toward the outstanding loans prior to the filing of the suit.
“The law is clear. A company that sponsors a plan intended to benefit employees cannot use its assets for any other business purpose,” said Howard Marsh, director of the Atlanta regional office of the Employee Benefits Security Administration (EBSA).
Employers with similar problems, who are not yet the subject of an investigation by EBSA, may be eligible to participate in the department's Voluntary Fiduciary Correction Program (VFCP). Participation in the VFCP requires employers to make workers whole but allows them to avoid EBSA enforcement actions, civil penalties and any applicable excise taxes. For more information see www.dol.gov/ebsa.
Employers and workers can reach the Atlanta regional office at 404.562.2156 or EBSA’s toll free number, 1.866.444.EBSA (3272), for help with problems relating to private-sector pension and health plans.
Chao v. Wade & Sons, Inc.
Civil Action No. 5:00CV-583-4 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 202.693.7755.
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