FROM: U.S. DEPARTMENT OF LABOR
Judge orders restoration of more than $1.6 million to Sunkist Growers Inc. retirement plans
LOS ANGELES — The U.S. Department of Labor today announced that Sunkist Growers Inc. and fiduciaries for the company's retirement plans were required to restore $1,620,420 in losses to employee benefit plans under the terms of a consent judgment and order. The decision, entered in the U.S. District Court for the Central District of California, follows an investigation by the department's Employee Benefits Security Administration that found that the citrus farming cooperative, based in Sherman Oaks, Calif., and the plans' fiduciaries mishandled employee retirement funds in violation of the Employee Retirement Income Security Act.
"Retirement plan assets represent workers' hard-earned savings, not a source of operating funds that companies can choose to use as they see fit," said Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi. "This is a case of plan fiduciaries failing in their legal and ethical duties to act solely in the interest of plan participants."
The department previously filed a lawsuit alleging that from January 2006 through April 2011, the defendants used retirement plan assets to improperly reimburse the company for expenses including salaries and benefits for employees and managers working in various departments at Sunkist Growers.
EBSA 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.
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.
