The U.S. Department of Labor has secured a consent judgment requiring Dr. Robert B. Pamplin Jr. and the R.B. Pamplin Corp. to restore at least $20,600,000 in assets to the company's pension plan. This follows the plan's unlawful acquisition of company-owned real estate, which endangered the retirement security of thousands of employees.
The U.S. District Court for the District of Oregon entered the judgment, which includes an admission by Pamplin and the company that they caused the R.B. Pamplin Corporation Pension Plan to acquire interests in more than 20 company-owned properties, surpassing legal limits under the Employee Retirement Income Security Act (ERISA). They agreed to compensate for losses incurred by their actions, including illegal investments in overvalued and environmentally degraded real estate.
An investigation by the department’s Employee Benefits Security Administration revealed that Pamplin, acting as trustee, directed the pension plan to acquire real estate from his own company, putting employees' retirement benefits at risk.
"The agreement protects the retirement benefits of thousands of workers and holds Pamplin pension plan fiduciaries accountable for violating federal regulations," said EBSA San Francisco Regional Director Klaus Placke. "It also creates a clear process for untangling harmful real estate deals and putting the pension plan back on track."
Since 2019, interests in 27 company-owned properties were acquired by the plan, jeopardizing millions in retirement funds due to difficulties in selling these often overvalued properties with significant liabilities. The acquisitions violated ERISA's restriction that employer-owned real estate cannot exceed 10 percent of a plan's asset fair market value.
The consent judgment mandates that Pamplin and his company restore all losses incurred by their illegal conduct. They must contribute $23.1 million in assets to the plan and take back certain environmentally degraded properties in exchange for additional assets worth at least $15.4 million.
Pamplin and R.B. Pamplin Corp are also required to compensate for costs related to improperly added real estate holdings and reimburse lost earnings due to improper investment practices. Any remaining shortfall must be covered by them.
Pamplin is permanently barred from serving as a fiduciary or service provider to any ERISA-covered employee benefit plan since ERISA requires fiduciaries to act solely in participants' interest.
Additionally, there are significant restrictions on their ability to sell personal and corporate assets that may be used to satisfy amounts due under this judgment. A civil penalty equal to 20 percent of recovery amount is imposed along with providing at least $3 million worth of property as security for this penalty.
"The evidence proves that Dr. Pamplin violated ERISA by failing in his duty to protect and secure his employees’ promised pension benefits," said Regional Solicitor Marc Pilotin in San Francisco. "The department will closely monitor compliance with this judgment."
Gallagher Fiduciary Advisors LLC will serve as an independent fiduciary responsible for bringing the plan into compliance with ERISA standards including selling imprudent real estate holdings.
Employers and workers can contact EBSA toll-free at 866-444-3272 for assistance regarding private sector job-based retirement and health plans.
