DETROIT – A federal judge has signed a consent order and judgment against a Madison Heights company and ordered fiduciaries of the company’s retirement plan to restore $50,764 in employee payroll-deducted retirement contributions and lost opportunity costs to the plan, and pay a $10,153 penalty for violating the Employee Retirement Income Security Act.
The court’s action follows a U.S. Department of Labor Employee Benefits Security Administration investigation that found Gibson Television Service Inc.’s fiduciaries – President David Gibson and Director Robert Gibson – failed to remit and/or forward employee contributions in a timely manner to the Gibson Television Service Inc. 401(k) Plan and Trust for pay dates from January 2016 through August 2019.
On Jan. 20, U.S. District Court Judge Laurie J. Michelson signed the consent order and judgment appointing AMI Administrators Inc. as independent fiduciary to the plan and authorized AMI to reallocate $50,764 from the defendants’ individual plan accounts for the unremitted funds and lost opportunity costs to be reallocated to the accounts of the remaining participants and beneficiaries of the plan to ensure the participants’ individual plan accounts receive all amounts they were owed as a result of the fiduciary breaches. Further AMI was authorized to reallocate $3,570 from the defendants’ individual accounts to cover plan expenses. The order also bars the defendants from serving as fiduciaries of an ERISA-covered plan in the future.
“When fiduciaries fail to act with integrity in their obligations to the hard-earned retirement savings of participants it puts the future savings of hard-working employees and the viability of their retirement plan in jeopardy,” said Employee Benefits Security Administration Regional Director L. Joe Rivers in Cincinnati. “The U.S. Department of Labor’s Employee Benefits Security Administration is committed to ensuring the integrity of employee benefit programs and holding those who violate the law accountable.”
AMI will distribute the assets to eligible participants and terminate the plan. Both Robert Gibson and David Gibson waived reimbursement to their individual accounts.
Employers and workers can reach EBSA toll-free at 866-444-3272 for help with problems related to private sector retirement and health plans. Learn more about EBSA.
Gibson Television Service Inc, David C. Gibson, Robert J. Gibson, Gibson Television Service Inc. 401(k) Plan and Trust, U.S. District Court for Eastern District of Michigan, Southern Division
Civil Case No: 21-C-10932