Human Capital & Careers

Puny Company Gets Big-Time DOL Notice

The Labor Department catches up with a Massachusetts dentist who misused profit-sharing plan assets.
Stephen TaubOctober 3, 2006

The Department of Labor delivered a loud message to very small, single-proprietor businesses: No matter the size, no company will escape scrutiny if it violates the nation’s pension rules.

The government agency, which enforces the Employee Retirement Income Security Act (ERISA), announced that a Massachusetts dentist agreed to restore more than $118,000 in misused assets to the profit-sharing plan of the dental practice’s employees. Robert E. Chavez was permanently barred from service as a fiduciary to any ERISA-covered plan and was ordered to appoint an independent fiduciary to serve as trustee of the profit-sharing plan, according to a consent judgment and order obtained by the DOL for alleged violations of the ERISA. The DOL noted that Chavez has already restored $118,203 in restitution to the plan.

“Those who manage workers’ retirement plans have a legal responsibility to properly administer and protect the funds entrusted to them,” said Ann Combs, assistant secretary of labor for the Employee Benefits Security Administration (EBSA), in a statement. “The Labor Department will not hesitate to act to ensure that workers are paid the benefits they are promised.”

The DOL explained that Chavez was the plan’s trustee and was responsible for administering the assets of the plan. In its lawsuit, DOL alleged that Chavez used plan assets to make loans to entities in which he had a direct personal interest. Chavez also allegedly failed to collect money owed to the plan on the outstanding loans.