- 15 -
determined by STEP’s Independent Fiduciary”.8 The STEP plan
marketing documents advised participating employers that
deductions for contributions to the STEP plan could be ultimately
disallowed but that only taxes and interest, and no additional
amounts such as penalties, would then be due because STEP had
received an “opinion letter” from Mr. Mamorsky stating that it
was “more likely than not” that the deductions would be allowed.
E. Independent Fiduciary
The STEP plan administrator had the sole authority to make
determinations relating to “dismissal”, “Total Disability”, or
“death”, conditions that were prerequisites to the receipt of
benefits from the STEP plan as written. In making those
determinations, the plan administrator was required to rely on
rules and regulations established by the STEP plan “Independent
Fiduciary”. Jules Pagano (Mr. Pagano) was the independent
fiduciary of the STEP plan from its inception through February
2002; the STEP plan did not have any independent fiduciary
thereafter. While serving as independent fiduciary, Mr. Pagano
was authorized to and routinely did provide individuals seeking
to obtain benefits under the plan with personal guidance on how
to frame their requests so that they would receive their
anticipated benefits under the plan as written. Upon receiving
8 In operation, however, forfeitures could occur only when
projected plan assets equaled or exceeded projected plan
liabilities on an employer by employer basis.
Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Next
Last modified: March 27, 2008