Perez v. I.Q. Marketing, Inc. et al

Filing 17

ORDER Granting The Secretary's Motion for Default Judgment 10 and further directing. LET JUDGMENT BE ENTERED ACCORDINGLY. (Written Opinion). Signed by The Hon. Paul A. Magnuson on 05/15/2015. (LLM)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Thomas E. Perez, Secretary of Labor,
United States Department of Labor,

Case No. 14-cv-3187 (PAM/BRT)

Plaintiff,
v.

ORDER

I.Q. Marketing, Inc., Janet Finken, and
I.Q. Marketing, Inc. 401(k) Plan,
Defendants.
___________________________________________________________
This matter is before the Court on the Secretary’s Motion for Default Judgment.
Plaintiff Thomas E. Perez, Secretary of Labor, United States Department of Labor (the
“Secretary”), filed the Complaint. Defendants Janet Finken, I.Q. Marketing, Inc. (“I.Q.
Marketing”), and I.Q. Marketing, Inc. 401(k) Plan (“Plan”) (collectively, “Defendants”)
were duly served, failed to plead or otherwise defend within the time prescribed by law,
had default entered against them by this Court, and failed to administer and terminate the
Plan, including making distributions to Plan participants as verified by the attested
declaration of the Secretary’s investigator. Accordingly, IT IS HEREBY ORDERED
that:
1.

The Secretary’s Motion for Default Judgment (Docket No. 10) is

GRANTED;
2.

Finken and I.Q. Marketing are removed from their positions as fiduciaries

with respect to the Plan;

3.

Finken and I.Q. Marketing are permanently enjoined from violating the

provisions of Title I of ERISA;
4.

Finken and I.Q. Marketing are permanently enjoined from acting as

fiduciaries or service providers to any ERISA-covered employee benefit plan;
5.

The Plan is amended to permit the set off of $1,927.04 of Finken’s Plan

account for losses to be incurred by the Plan resulting from fiduciary breaches, requiring
the appointment of an Independent Fiduciary to terminate the Plan and issue
distributions, as authorized by § 1502(a) of the Tax Payer Relief Act of 1997, Pub. L. No.
105-34, § 1502(a), 11 Stat. 788, 1058-59 (1997) (codified at 29 U.S.C. Section
1056(d)(4));
6.

Grabel, Schniders, Hollman & Co., PC of 206 W. Argone Kirkwood, MO

63122 (“Independent Fiduciary”), is hereby appointed as the independent fiduciary for
the Plan to administer the Plan and to terminate the Plan consistent with the Plan’s
governing documents, the Internal Revenue Code, and ERISA.

The Independent

Fiduciary shall have the following powers, duties and responsibilities:
a.

The Independent Fiduciary shall have responsibility and authority to
collect, liquidate, and manage such assets of the Plan for the benefit of the
eligible participants and beneficiaries of the Plan who are entitled to receive
such assets, until such time that the assets of the Plan are distributed to the
eligible participants and beneficiaries of the Plan and the Plan is fully
terminated;

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b.

The Independent Fiduciary shall exercise reasonable care and diligence to
identify and locate each participant and beneficiary of the Plan who is
eligible to receive a payment under the terms of this Default Judgment and
to disburse to each such eligible participant or beneficiary the payment to
which he or she is entitled. The Independent Fiduciary shall comply with
the guidance in EBSA Field Assistance Bulletin 2014-01, Fiduciary Duties
and Missing Participants in Terminated Defined Contribution Plans (Aug.
21, 2014) available at http://www.dol.gov/ebsa/regs/fab2014-1.html, in
attempting to locate participants and handling missing participants;

c.

The Independent Fiduciary shall have full access to all data, information
and calculations in the Plan's possession or under its control, including that
information contained in the records of the Plan's custodial trustees and
other service providers, bearing on the distribution of benefit payments,
participant account balances and current plan assets;

d.

The Independent Fiduciary may retain such persons and firms including,
but not limited to, accountants and attorneys, as may be reasonably required
to perform his duties hereunder;

e.

The Independent Fiduciary shall initiate the termination of the Plan in
accordance with ERISA within thirty (30) days of entry of this order. The
Independent Fiduciary’s responsibilities shall include, but not be limited to,
causing the distribution of the Plan’s assets to the Plan participants and
filing all appropriate documents with the various government agencies.
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The Plan shall be fully terminated within ninety (90) days of the entry of
this Order. Within thirty (30) days from the date that the Plan is fully
terminated, the Independent Fiduciary shall provide satisfactory proof of
such termination, including proof of issuance of the Plan’s participant
distributions, to the Regional Director of the Employee Benefits Security
Administration, United States Department of Labor, 2300 Main Street,
Suite 1100, Kansas City, MO 64108;
f.

Within seven (7) days of entry of this judgment, the Independent Fiduciary,
pursuant to § 1502(a) of the Taxpayer Relief Act of 1997, codified at 29
U.S.C. § 1056(d)(4), shall cause $1,927.04 from Finken’s current account
balance to be reallocated to a Plan account solely to be used to pay
reasonable fees, costs, and expenses of the Independent Fiduciary; and

g.

After terminating the Plan for the services performed pursuant to this
Default Judgment, the Independent Fiduciary shall receive compensation,
from the Plan not to exceed $3,600 for fees, costs, and expenses (including
the $1,927.04 referenced in paragraph E(6) above reasonably and
necessarily incurred in administering and terminating the Plan.

LET JUDGMENT BE ENTERED ACCORDINGLY.

Dated: Friday, May 15, 2015

s/ Paul A. Magnuson
Paul A. Magnuson
United States District Court Judge

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