Pension Protection Act Blog

The Dept. of Labor announced that it has settled with Macristy Industries Inc. and its President, Jeffrey Barlow, for shortages in its cash balance plan. Macristy and Barlow paid $2.1 million into the plan as part of the consent judgment it reached with the DOL.

In January of 2007, the DOL had announced that it was filing a lawsuit against Macristy Industries and Barlow for alleged misuse of $1.8 million in assets in the company’s cash balance plan. On January 18, 2007, the DOL did so in the U.S. District Court for the District of Connecticut. This enforcement action was interesting because the DOL was not litigating over one of the more traditional cash balance issues, such as valuation of the hypothetical account balances. Instead, the DOL was litigating over a fundamental plan issue, the failure by the trustee to protect the assets in the trust. In this case, the DOL alleged that Macristy diverted funds from the cash balance plan to pay company expenses. The fact that this case involved a cash balance plan was simply extraneous to the real dispute, which was what did the trustee do with the assets in the plan.

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