Retirement plan assets are for the exclusive use of plan participants, it’s not supposed to be for the use of fiduciaries for their own use.
The fiduciaries of an international design firm in Moorestown, N.J. must pay more than $2 million to restore mismanaged assets to the company’s retirement plan and in penalties following an investigation and litigation by the Department of Labor.
DOL’s Employee Benefits Security Administration (EBSA) determined that InterArch Inc. and Shirley and Vernon Hill, fiduciaries of the InterArch Inc. Profit-Sharing Plan, violated their fiduciary duties under ERISA.
Through an investigation, the DOL discovered that from at least Aug. 30, 2016, through the plan’s June 30, 2020, termination, the fiduciaries invested the plan’s assets in two companies to which the fiduciaries had significant ties. Shirley Hill, who owns the design firm, invested the bulk of the plan’s assets in a bank owned by her spouse, Vernon Hill. Their unlawful investments cost the plan more than $17 million after the bank’s shares plummeted. The plan’s position in the stock of one of the companies reached almost 70% of the plan’s portfolio. In June 2020, the design firm terminated the plan and sold the shares for 96% less than their peak value.
InterArch Inc. and fiduciaries Shirley and Vernon Hill have agreed to pay $1,836,853, to plan participants and $183,685, in penalties to resolve the allegations.
InterArch Inc. and the Hills will additionally pay approximately $1.1 million to the retirement plan to resolve a separate private class action lawsuit filed by a former employee
