LEWISTON – The owner of the defunct Payroll Benefits Inc. of Auburn has agreed to repay $125,000 to 18 pension plans owned by small Lewiston-Auburn area businesses.
The U.S. Department of Labor reached a court agreement with Robert J. Montgomery on May 4 that requires Montgomery to repay money that he was supposed to deposit into the pension accounts of scores of individual employees at the 18 mostly L-A businesses.
Once Montgomery repays the pension funds, he will be assessed a monetary penalty by the federal Department of Labor, according to spokesman John Chavez of the department’s regional office in Boston.
Attempts to locate and contact Montgomery were unsuccessful Tuesday. The court documents listed a Minot address for him.
The federal agency announced the settlement on Tuesday in a news release.
“Those who manage workers’ retirement plans have a legal responsibility to properly manage and protect the funds entrusted to them,” Ann Combs, assistant U.S. labor secretary, stated in the release.
“When they fail to meet their responsibilities, the (department) will not hesitate to step in to ensure that workers are paid the benefits they are promised,” Combs said.
According to the consent agreement, Montgomery was the person responsible for ensuring that employees’ pension contributions were invested in the funds they had designated. The agreement states that Montgomery:
• was delinquent in forwarding the pension payments to Putnam Investments, the custodian for the plans’ assets;
• did not keep accurate records of individuals’ deferrals and account balances;
• provided delinquent and inaccurate quarterly statements to the plans’ participants;
• represented himself as an investment advisor to the employees involved in the plans;
• and paid himself commissions, indirectly, from the plans’ assets without disclosing to the participants that he was receiving commissions.
Montgomery cannot act in a fiduciary capacity for five years, the agreement stipulates.
The agreement requires Montgomery to make the first restitution payment on July 15 in the amount of $3,000. On Nov. 15, he must pay another $3,000 and thereafter make an annual payment based on his gross income.
If Montgomery files bankruptcy, the restitution must still be paid, according to the agreement.
Jennifer Parsons, general manager of Radio City of Lewiston, was delighted to hear the case had been settled and restitution would be made.
“Wow,” she said Tuesday, “I didn’t know it was settled.”
Parsons said Radio City now has a pension fund with another company.
Donald Grant, owner of Grant’s Bakery, another Lewiston business affected by Montgomery’s actions, said Tuesday he knew the federal DOL was pursuing Montgomery for sloppy bookkeeping, but had no inkling there was a settlement or that the bakery and its workers would get almost $6,000 from Montgomery in restitution.
“Sounds wonderful to me,” Grant said.