U.S. Labor Secretary sues Pa. company over ERISA violations

The federal government has filed a civil action against a Pennsylvania

company asserting violations of the Employee Retirement Income Security Act relating to the defendant’s alleged failure to properly fund employees’ retirement plans.

Attorneys M. Patricia Smith and Catherine Oliver Murphy, solicitors employed by the United States Department of Labor, filed suit at the U.S. District Court for the Eastern District of Pennsylvania on behalf of Secretary of Labor Thomas E. Perez, who accuses Thomas Ramsburg and his business TMR Inc., of failing to fund workers’ 401(k) plans.

The complaint alleges that for certain payroll periods between January 11, 2008 and January 7, 2011, the company deducted money from the participants’ pay as loan repayments to the plan, but then failed to remit the loan repayments to the plan.

The suit also says that during that same time period, the defendants remitted certain participant loan repayments late without interest.

“Ramsburg and the Company participated knowingly in or knowingly undertook to conceal acts or omissions by each other that they knew to be violations of ERISA,” the lawsuit reads. “Both Ramsburg and the Company knew that the other had violated ERISA, but did not make reasonable efforts under the circumstances to remedy the breaches.”

By failing to make reasonable efforts to remedy the breaches of which they had knowledge, Ramsburg and his company each are liable for the others’ fiduciary breaches under the ERISA, the complaint states.

The labor secretary is asking a federal judge to order the defendants to restore to the retirement plan all losses, including interest or lost opportunity costs and the costs of the independent fiduciary, which were caused by their alleged fiduciary misconduct.

The suit also seeks to have Ramsburg and his company removed as fiduciaries of the plan and of any employee benefit plan for which the two act as fiduciaries.

The government seeks to have the court appoint an independent fiduciary with plenary authority and control with respect to the management and administration of the 401(k) plan, including the authority to marshal assets on behalf of the Plan and to pursue claims on behalf of the plan, with all costs to be borne by the defendants.

The plaintiff also seeks to be awarded the costs related to the litigation.

According to its online biography, TMR Inc. is a marketing research firm with locations in Pennsylvania and Colorado.

 

The federal case number is 2:13-cv-05073-CMR.