Western Mixers Inc., a Los Angeles-based supplier of nuts, dried fruits, rice and dried beans, will restore nearly $1.3 million to its pension plan after reaching a settlement with the Department of Labor, the agency announced.
Executives at Western Mixers had been accused of failing to deposit about $952,511 in employer contributions into its pension plan, as well as illegally withdrawing $565,000 and redistributing it to other corporate accounts, according to the agency's statement.
In a consent judgment approved on May 14, Western Mixers agreed to repay the missing money with interest, totaling $1.29 million, plus a penalty worth up to 20% of the repaid amount.
“This case demonstrates a clear breach of fiduciary duty,” Phyllis C. Borzi, assistant labor secretary for the Employee Benefits Security Administration, said in the statement.
In accordance with the settlement, a court-appointed independent fiduciary will terminate Western Mixers’ existing pension plan, including the collection, payout and administration of its assets. The company’s owners, Frank Rudy and David Bolstad, as well as its CFO, Robert Fischer, have been permanently removed as fiduciaries to any plans covered by ERISA.
The DOL’s case against Western Mixers came after an investigation by the EBSA, which uncovered the five-year-long spree of missing contributions and unauthorized withdrawals.
Western Mixers had $2 million in pension assets as of Dec. 31, 2010, according to the company’s latest Form 5500 filing.
Matt Dunning is associate editor of Business Insurance, a sister publication of Pensions & Investments.