The U.S. District Court of Minnesota has ordered a provider of staffing and IT consultancy to repay $24k in retirement plan contributions.
Virtual Matrix Corp. and CEO Suman Thotakura were initially embroiled in a Department of Labour suit last year. The Secretary of Labor filed a lawsuit on Aug. 30, 2023, against the company and the man running things.
The suit alleged that they both “failed to remit the voluntary salary contributions and participant loan repayments to the Virtual Matrix 401(k) Profit Sharing Plan from April 30, 2021, to June 30, 2022, in violation of federal law.”
Virtual Matrix ordered to pay back to employees
The company, based in Edina, Minnesota was at the center of the suit that aimed to make the failed plan contributions and the withheld monies whole again.
At that time a court document stated the court aimed to make the “plan whole and permanently ban the company and its CEO from serving or acting as fiduciaries or service providers to any other ERISA-covered employee benefit plan and to remove them from fiduciary positions they now hold.”
This has been achieved and the company will now restore $24,847 in employees’ voluntary salary contributions, $759 in participant loan repayments and lost opportunity costs of $3,955 to the Virtual Matrix 401(k) Profit Sharing Plan.
Thotakura will be forced to pay $29,562 out of his account to amend the “losses to the plan resulting from his fiduciary breaches,” said the statement.
“The court’s action restores to participants their voluntary salary contributions that they trusted were earning interest to prepare for their future,” said Employee Benefits Security Administration Regional Director Mark Underwood in Kansas City, Missouri. “Failing to forward voluntary employee contributions to employee retirement plans violates their trust and directly impacts their retirement savings.”
Image: Pixlr.
