The Labor Department recently recovered $700,000 in pension funds for the Upper Peninsula Plumbers and Pipefitters Pension Fund (which covers more than 800 union members) in Lansing, Mich. The funds are restitution for imprudently investing pension assets in the Aspen Bay Pulp and Fibre LLC, a company formed to provide working capital for the proposed development of the Aspen Bay Pulp Mill project in Menominee, Mich.
The lawsuit (Chao v. Hedstrom, Civil Action No. 1:05-cv-523), filed in federal district court in Michigan, alleges that trustee Jerome Hedstrom violated the Employee Retirement Income Security Act when he failed to investigate the merits of the Aspen Bay investment before committing pension assets to the project. DOL also may assess a civil money penalty under ERISA.