Sunkist ordered to restore pension plan losses
By Paula Aven Gladych
A judge has ordered Sunkist Growers Inc. and the company’s retirement plan fiduciaries to restore $1.6 million in losses to employee benefit plans.
The U.S. Department of Labor sued the Sherman Oaks, Calif.-based company in the U.S. District Court for the Central District of California, alleging that from January 2006 through April 2011, the defendants improperly used plan assets to reimburse the company for expenses, including salaries and benefits for employees and managers working at Sunkist Growers.
The actions were in direct violation of the Employee Retirement Income Security Act, according to the court decision.
Employee Benefit Security Administration investigators also found that the company was reimbursed by the plans based on projected expenses determined at the beginning of the year rather than on the actual expenses incurred, and that no adjustments were made to repay the plans for the overpayments that were made.
"Retirement plan assets represent workers' hard-earned savings, not a source of operating funds that companies can choose to use as they see fit," Assistant Secretary of Labor for Employee Benefits Security Phyllis Borzi said in a statement. "This is a case of plan fiduciaries failing in their legal and ethical duties to act solely in the interest of plan participants."
The judgment permanently enjoins the fiduciaries from violating ERISA and requires the appointment of an independent fiduciary to review and approve any future services provided by Sunkist Growers to the plans.
Originally published on BenefitsPro.com