MOORESTOWN, NJ – The fiduciaries of an international design firm in Moorestown must pay more than $2 million to restore mismanaged assets to the company’s retirement plan and in penalties after the U.S. Department of Labor agreed to a settlement following an investigation and litigation.
An investigation by the department’s Employee Benefits Security Administration determined that InterArch Inc. and Shirley and Vernon Hill, fiduciaries of the InterArch Inc. Profit-Sharing Plan, violated their fiduciary duties under the Employee Retirement Income Security Act. EBSA determined that – from at least Aug. 30, 2016, through the plan’s June 30, 2020, termination – the fiduciaries invested the plan’s assets in an undiversified manner in two companies to which the fiduciaries had significant ties. The plan’s position in the stock of one of the companies reached almost 70 percent of the plan’s portfolio before it fell drastically in value, resulting in millions of dollars in losses to the plan.
“The law requires fiduciaries to discharge their duties solely in the interests of plan participants and beneficiaries in a prudent manner, and to diversify plan investments so the risk of large losses is minimized,” said Employee Benefits Security Administration Acting Regional Director Cristina O’Brien, in Philadelphia. “Fiduciaries are also prohibited from using plan assets for their own interests.”
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