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Release Date: 06/05/2002
Release Number: 233
Contact Name: Gloria Della
Phone Number: 202.693.8666
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Chicago, Illinios - The
U.S. Department of Labor sued the defunct Chicago-based Tomko Machine Works,
Inc., and its vice president on May 29, 2002, for misusing $120,882 in employee
contributions and participant loan payments owed to the company’s profit
sharing 401(k) plan. |
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“This action reaffirms our commitment to protection of the hard-earned
benefits promised by employers,” said Kenneth M. Bazar, Director of the
Chicago Regional Office of the Pension and Welfare Benefits Administration (PWBA)
which investigated the case. |
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The
suit alleges that the firm and vice president Patricia Tomaskovic violated the
Employee Retirement Income Security Act (ERISA) by retaining approximately
$99,000 in employee contributions and participant loan repayments in the general
assets of Tomko Machine Works rather than remitting the assets to the plan over
the period November 1, 1995 to August 31, 2000. The suit also alleges that the
defendants retained $21,882 in voluntary employee contributions and loan
payments in the company’s general assets during the same period, thereby
failing to deposit them in the plan account in a timely manner. The
defendants are also charged with failing to create written plan documents, to
obtain the fidelity bond required by ERISA, and to collect two outstanding loans
owed to the plan by a participant. |
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As
relief, the suit seeks a court order to require that the defendants reimburse
the plan for all losses with interest, to offset the plan account of Tomaskovic
to restore plan assets and re-distribute the money to the remaining plan
participants, collect the outstanding participant loans, and to appoint an
independent fiduciary to terminate the plan and distribute its assets to the
participants. |
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The
company ceased operations in August 2001 and was involuntarily dissolved by the
State of Illinois on April 1, 2002. The plan covered seven participants
and had assets of $247,794 as of October 31, 2000. |
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The department's
Voluntary Fiduciary Correction Program (VFCP) allows plans to correct failures
in forwarding contributions withheld from employees’ paychecks and certain
other ERISA violations. Eligible applicants that properly correct
transactions under the program will not be subject to the enforcement action
described above or liable for civil penalties. Excise tax liability under
section 4975 of the Internal Revenue Code is also eliminated for certain
transactions corrected through the VFCP. |
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This suit was filed in federal district court in Chicago,
Illinois.
Employers and workers can contact the regional office at 312.353.0900 or
PWBA’s Toll-Free Employee & Employer Hotline number, 1.866.275.7922, for help with any problems relating
to private-sector pension and health plans. |
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(Chao v. Tomko Machine Works, Inc.
Civil Action No. 02 C 3814) |
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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. |
