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Release Date: August 10, 2007
Release Number: 07-1220-CHI
Contact Name: Brad Mitchell
Phone Number: 312.353.6976
Cleveland – The U.S. Department of Labor has
recovered nearly $75,000 in employee contributions, plus over $18,000 in
lost interest, owed to the Jared Group Inc. 401(k) Plan by company
president Robert L. Johnson, who the department alleged in a lawsuit had
failed to forward employee contributions to the company’s retirement
plan and to segregate plan contributions from the general operating
assets of the company.
In a consent order and judgment filed in federal
district court in Cleveland, Johnson agreed to pay the contributions,
which he already has restored to the plan, as well as the interest.
This judgment resolves the department’s suit
alleging that Johnson violated the Employee Retirement Income Security
Act (ERISA) by failing to remit contributions deducted from employees’
paychecks to the plan in a timely manner, if at all, during the period
from January 2001 to December 2004, when the company terminated business
operations. Jared was a Cleveland-based information technology and
software systems consulting business.
The judgment also permanently enjoins Johnson from
serving as a fiduciary to ERISA-covered plans and requires the
appointment of an independent fiduciary to terminate this plan and
distribute its assets to participants and beneficiaries.
“The Labor Department will act when plan
fiduciaries fail to carry out their duty to protect retirement plan
assets held on behalf of participants,” said Joseph Menez, director of
the department’s Cincinnati Regional Office of the Employee Benefits
Security Administration (EBSA).
Employers with similar problems who are not yet
subjects of investigation by EBSA may be eligible to participate in the
department’s Voluntary Fiduciary Correction Program (VFCP).
Participation in the VFCP requires employers to make workers whole but
allows them to avoid EBSA enforcement actions and civil penalties as
well as any applicable excise taxes. For more information about the VFCP,
see www.dol.gov/ebsa.
Employers and workers can reach EBSA’s Cincinnati
Regional Office at 859.578.4680 or toll-free at 1.866.444.EBSA (3272)
for help with problems relating to private sector retirement and health
plans. In fiscal year 2006, EBSA achieved monetary results of $1.4
billion related to the pension, 401(k), health and other benefits for
millions of American workers and their families.
Chao v. Johnson
Civil Action Number 1:07CV653
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Department's Newsroom
page. The information in this news release will be made available
in alternate format upon request (large print, Braille, audio tape or
disc) from the COAST office. Please specify which news release when
placing your request at 202.693.7828 or TTY 202.693.7755. The U.S.
Department of Labor is committed to providing America's employers and
employees with easy access to understandable information on how to comply
with its laws and regulations. For more information, please visit the
Department's Compliance
Assistance page.
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