WASHINGTON, July 31 -- The U.S. Department of Labor'sEmployee Benefits Security Administration issued the following news release:
The U.S. Department of Labor has obtained a consent judgment ordering a Plymouth Meeting insurance brokerage firm and its chief executive officer to return $272,722 to plan participants and beneficiaries. The department alleges that Dietrich & Associates Inc., and CEO and sole shareholder Kurt E. Dietrich, obtained the money inappropriately when they provided services to an Employee Retirement Income Security Act-covered retirement plan sponsored by Memorial Hospital-West Volusia Inc. in Deland, Fla. The judgment resolves a lawsuit filed by the department following an investigation by the Employee Benefits Security Administration that found ERISA violations.
"The department was prepared to prove that the defendants took advantage of their position with the plan to earn undisclosed payments from the plan's insurance company," said Marc Machiz, EBSA's regional director in Philadelphia. "We are pleased with the consensual resolution of the litigation, which sends a clear message that plan fiduciaries will be held accountable when they don't act in the best interest of the plan and its participants."
Under the terms of the consent order, in addition to paying the disgorgement and a $27,273 penalty, the defendants must enter into written agreements, which disclose all information required by the law with any ERISA plans they service in the future. The consent judgment also requires the defendants to ensure that any entities they control in the future comply with the requirements of the consent order.
The department filed the lawsuit in September 2012 in the U.S. District Court for the Eastern District of Pennsylvania, alleging the defendants violated ERISA when the retirement plan contracted Dietrich & Associates to act as its fiduciary and obtain bids from insurance companies for a termination annuity for a fee of $50,000. It also alleges that the company failed to disclose to plan fiduciaries a pre-existing arrangement with Hartford Life Insurance Co., the insurance company that won the bid, which entitled Dietrich & Associates to receive additional undisclosed compensation. The case was litigated by the department's Office of the Solicitor in Washington, D.C.
EBSA protects the retirement, health and other workplace-related benefits of America's workers, retirees and their families. The agency oversees approximately 701,000 private sector retirement plans, 2.3 million health plans and other plans that provide benefits to more than 141 million Americans. Collectively, these plans hold more than $7.3 trillion in assets. Additional information can be found at www.dol.gov/ebsa.
Perez v. Dietrich & Associates Inc. et al.
Civil Action Number 2:12-cv-04910
U.S. Department of Labor news materials are accessible at www.dol.gov. The information above is available in large print, Braille, audio tape or disc from the COAST office upon request by calling 202-693-7828 or TTY 202-693-7755.
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