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LOS ANGELES—A California fruit and nut company will restore nearly $1.3 million to its pension plan after reaching a settlement with the U.S. Department of Labor, the agency announced last week.
Executives at Western Mixers Inc., a Los Angeles-based supplier of nuts, dried fruits, rice and dried beans, had been accused of failing to deposit approximately $952,511 in employer contributions into its pension plan, as well as illegally withdrawing $565,000 and redistributing it to other corporate accounts, according to the agency's statement.
In a consent judgment approved on May 14, Western Mixers agreed to repay the missing money with interest, totaling $1.29 million, plus a penalty worth up to 20% of the repaid amount.
“This case demonstrates a clear breach of fiduciary duty,” Phyllis C. Borzi, assistant labor secretary for employee benefits security, said in the statement. “Employers hold positions of trust that are violated when money intended for retirement benefits is directed to some other use. Individual trustees have a duty to protect a retirement plan and, as in this case, may be personally liable for the funds.”
In accordance with the settlement, a court-appointed independent fiduciary will terminate Western Mixers’ existing pension plan, including the collection, payout and administration of its assets. The company’s owners, Frank Rudy and David Bolstad, as well as its chief financial officer, Robert Fischer, have been permanently removed as fiduciaries to any plans covered by the Employee Retirement Income Security Act of 1974.
The DOL’s case against Western Mixers came after an investigation by the department’s Employee Benefits Security Administration, which uncovered the five-year-long spree of missing contributions and unauthorized withdrawals.