WSJ: Labor Dept Files Suit Against Alabama Co., Pension Trustees

[Omaha Steve]

http://online.wsj.com/article/BT-CO-20090813-717823.html

* AUGUST 13, 2009, 5:40 P.M. ET

By Darrell A. Hughes Of DOW JONES NEWSWIRES


WASHINGTON (Dow Jones)--The U.S. Labor Department Thursday said it has sued an Alabama wholesale distributor of vinyl siding and windows for allegedly misusing about $900,000 in pension assets.

The Labor Department said defunct Vinyl-Mark Products Inc. of Hueytown, Ala., used $898,259.69 to pay the company's operating expenses.

According to the department, the company's pension trustees - Willard Bailey Jr. and Jessie Mae Bailey - violated federal law by making a "series of transfers from the plans to the operating accounts of the company at various times between October 2004 and February 2007."

The department is asking the court to appoint an independent fiduciary to oversee the plans and prohibit the plans' trustees from serving in a fiduciary capacity to any plan governed by federal law.

Other requests made by the department in the lawsuit includes efforts to offset retirement accounts owned by the trustees. Any money offset would be allocated to the accounts of the plans' remaining participants.

This lawsuit follows a judgment the Labor Department won last week regarding a Chicago-based investment firm that was ordered to restore $50 million in losses to five Michigan pension funds for allegedly misusing those plans assets.

Vinyl-Mark, formerly known as First Alabama Supply Co. Inc., sponsored a defined benefit plan for 59 participants and a profit sharing plan covering 29 participants. As of Dec. 31, 2005, the plans held cumulative assets of $701,361.

The Labor Department is seeking a court order that requires the company and named defendants to "restore all losses incurred by the plans and disgorge any profits or illegal gains."

Efforts to reach company representatives were unsuccessful.

[LiberalFighter]

1. I wonder what percentage of non union companies have their pension

overseen by an independent company.

And how many union companies are overseen by an independent company.