The Kentucky Bankers Association and current and former trustees of its health and welfare program will pay $1,561,818 in losses to the KBA Benefits Trust, after a U.S. Department of Labor investigation found they illegally authorized KBA and its for-profit subsidary, KenBanc Insurance, to receive "impermissible insurance commissions, fees for administrative tasks, and reimbursements from the trust’s assets for employee salaries and office space lease payments from Feb. 4, 2011, through Sept. 22, 2017," said a news release from the Labor Department.
"During this period, multiple defendants simultaneously served as trustees of the trust and directors and officers of the KBA or KBI," the release said. The department's Employee Benefits Security Administration found "the defendants failed to ensure KBA and KBI did not receive more than their permissible direct expenses for services performed for the trust," it said. "As a result, the defendants caused $1,489,231 in losses to the trust in addition to $72,587 in lost potential earnings."
The agreement is part of a consent decree entered in U.S. District Court for the Western District of Kentucky. EBSA Regional Director L. Joe Rivers said, “This settlement restores money to those plan participants and employers who were harmed by the violations. Plan trustees must work solely in the interest of plans and participants.”
Employers and workers who have problems related to private-sector health and retirement plans can contact EBSA toll-free at 866-444-3272.
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