Federal court requires R.B. Pamplin Corp., owner to restore at least $20.6M in assets to pension plan, unwind $15.4M in illegal real estate investments

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Federal court requires R.B. Pamplin Corp., owner to restore at least $20.6M in assets to pension plan, unwind $15.4M in illegal real estate investments

Owner, company admit to violating federal retirement law

PORTLAND, OR - The U.S. Department of Labor has obtained a consent judgment requiring Dr. Robert B. Pamplin Jr. and the R.B. Pamplin Corp. to restore at least $20,600,000 in assets to the company's pension plan after the plan's unlawful acquisition of company-owned real estate jeopardized the retirement security of thousands of the company's employees.

Entered by the U.S. District Court for the District of Oregon, the judgment includes an admission by Pamplin and the company that they caused the R.B. Pamplin Corporation Pension Plan to acquire interests in more than 20 company-owned properties, exceeding the legal limit under the Employee Retirement Income Security Act. Pamplin and the company also agreed to restore losses to the pension plan caused by their actions, including illegal investments in overvalued and environmentally degraded real estate.

An investigation by the department's Employee Benefits Security Administration found that Pamplin, acting as trustee, directed the pension plan to acquire real estate from his own company, putting his employees' retirement benefits at risk.

"The agreement protects the retirement benefits of thousands of workers and holds Pamplin pension plan fiduciaries accountable for violating federal regulations," said EBSA San Francisco Regional Director Klaus Placke. "It also creates a clear process for untangling harmful real estate deals and putting the pension plan back on track."

Since 2019, the plan acquired interests in 27 company-owned properties. These acquisitions jeopardized millions of dollars in retirement funds for thousands of employees because the properties were difficult to sell, often overvalued and frequently carried significant liabilities. The plan also failed to comply with ERISA's restriction that employer-owned real estate cannot exceed 10 percent of the plan assets' fair market value.

The consent judgment requires that Pamplin and the company restore all losses incurred by the pension plan due to their illegal conduct. They must contribute $23.1 million in assets to the plan and take back the environmentally degraded Ross Island and Tait properties in exchange for additional assets worth at least $15.4 million.

Pamplin and R.B. Pamplin Corp. must also compensate the plan for the costs of holding and selling real estate added improperly. They must also reimburse the plan for lost earnings it could have gained had the assets of the plan been invested properly. Any remaining shortfall must be covered by Pamplin and the company.

Pamplin is permanently barred from serving as a fiduciary of, or service provider to, any ERISA-covered employee benefit plan, as ERISA requires fiduciaries to act solely in the interest of participants and beneficiaries.

Additionally, Pamplin and the company face significant restrictions in their ability to sell personal and corporate assets that may be used to satisfy the amounts due under the consent judgment. They must also pay a civil penalty equal to 20 percent of the recovery amount and provide at least $3 million worth of property as security for the penalty.

"The evidence proves that Dr. Pamplin violated ERISA by failing in his duty to protect and secure his employees' promised pension benefits. The department will closely monitor compliance with this judgment to ensure he and his company meet their legal obligations," said Regional Solicitor Marc Pilotin in San Francisco. "We remain committed to holding plan fiduciaries accountable when they break the law and fail to keep their promises."

Gallagher Fiduciary Advisors LLC will serve as the plan's independent fiduciary and investment manager responsible for bringing the plan into compliance with ERISA, including selling all imprudent real estate holdings.

Employers and workers can reach EBSA toll-free at 866-444-3272 for help with problems and questions related to private sector job-based retirement and health plans.

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