Facts

Mario del Castillo and other plaintiffs were employed by defendant Child Care Community Council of Santa Clara County Inc. (4Cs), a non-profit corporation. She and others brought action under Title I of the Employee Retirement Income Security Act (ERISA), to recover benefits that plaintiffs were due because of the benefits. The other defendants included members of 4Cs Board of Trustees--Ben Menor, Xiaoyan Xu, Clarence Madrilejos, James McDaniel, Julienne La Fitte, Jamie Gallardo, Connie Jimenez, Maria Reyes and Faye Sears; executive director of 4Cs--Alfredo Villasenor; Logan Group Securities, Kevin Logan, Cetera Financial Group; Mary Chacon, who acted as investment advisers and brokers; Life Insurance Company Southwest, who was the insurer of the life annuity contracts; First Allied Retirement Services Inc., and its plan administrator, Robert C. Unger.

PLAINTIFFS' CONTENTIONS: Plaintiffs contended that the defined contribution and profit sharing plan failed to meet the tax-deferred qualification requirements for 401a plans. Also, plaintiffs alleged that they were presented with documents that supposedly enrolled them into retirement plans but were actually contracts that converted their retirement accounts into life annuities. Plaintiffs also noted that the filings indicated an amount of participants less than the number who actually participated. As such, defendants filed a form that required no financial statement and essentially, prevented plaintiffs from obtaining relevant information regarding the overall financial condition about the 4Cs plans. As the conversion of their accounts into life annuities constituted a formation of a new type of employee benefit account, the life annuity contracts also violated eligibility waiting periods required in ERISA. Moreover, the life annuity contracts excessively limited the right to withdraw funds by imposing a 10 percent fee on any amount withdrawn within 12 years of the contract's inception. Finally, plaintiffs argued other breach of fiduciary duties and contracts as required by ERISA and other California statutes, fraud in the inducement, concealment, intentional deceit and conversion.

DEFENDANTS' CONTENTIONS: Defendants denied all contentions.

Result

The case settled for $317,500.