A federal judge in Chicago has ordered the United EmployeeBenefit Fund in Northbrook to fix improper plan loans totaling morethan $1.7 million. The U.S. Department of Labor filed a lawsuitagainst the organization because an investigation by the EmployeeBenefits Security Administration found that the fund’s trusteesmade loans to participants that were improper, unsecured and wereallowed to become delinquent.

The judge signed a consent order between the secretary of laborand the fund to correct the fund’s governing documents so that theycomply with requirements of the Employee Retirement Income SecurityAct and the Internal Revenue Code. The amount of the improper loanswill be subject to the corrected loan documentation, repaid by planparticipants or treated as taxable distributions.

“Plan fiduciaries have a special obligation to maintain theintegrity of the plan for the purpose of ensuring future retirementincome. Allowing participants to withdraw plan assets withoutregard to ERISA’s safeguards violates that basic principle,” saidAssistant Secretary of Labor for Employee Benefits Security PhyllisC. Borzi. “Our legal action underscores the Labor Department’scommitment to hold accountable those who are entrusted with theassets of employee benefit plans.”

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