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Release Date: 09/30/2002
Release Number: 02-40
Contact Name: Sharon Morrissey
Phone Number: 202.693.8664
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Denver, Colorado - A settlement has
been reached between the U.S. Department of Labor and defendant Richard Johnson,
a fiduciary of the Colorado Springs, Colorado based Johnson Plumbing Company’s
SIMPLE IRA plan. From May 2000 to December 2000, Johnson withheld $34,282
from the paychecks of employees, intended as contributions to the plan, but
failed to forward appropriate amounts to their individual retirement accounts. |
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Richard Johnson, also the
company’s president, was ordered to begin repaying the losses, plus interest,
to the plan participants according to a payment schedule outlined in the court
order. He also was permanently barred from further violations of the
Employee Retirement Income Security Act (ERISA), which governs pension plans
offered by private-sector employers. |
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There were 46 participants in the plan and assets of
$160,794 in individual participant accounts as of December 31, 2000. |
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“The department’s goal is
to protect the hard-earned benefits promised to employees,” said Gregory Egan,
Regional Director of the Kansas City office of the Labor Department’s Pension
and Welfare Benefits Administration (EBSA), which conducted the investigation. |
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The department’s complaint
was filed September 10, 2002 and the consent judgment was entered on September
16, 2002
in the federal district court in Denver, Colorado. |
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Egan noted that employers with similar problems, who are
not yet the subject of an 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 applicable
excise taxes. |
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“The VFCP gives sponsors a way to come into compliance
with ERISA by restoring workers’ benefits while avoiding an investigation by
EBSA,” said Egan. “It protects workers’ health and retirement
benefits and allows us to focus our resources on those who seek to avoid
compliance.” |
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Employers and workers can
contact the Kansas City office at 1.816.426.5131 or call EBSA’s Toll-Free
Employee & Employer Hotline number at 1.866.275.7922 for help with problems relating to private-sector
pension and health plans. |
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(Chao v. Richard Johnson
Civil Action No. 02-B-1745)
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U.S. Department of Labor
news releases are accessible on the Internet. The information in this news
release will be made available in alternate format upon request (large
print, Braille, audio tape or disc) from the Central Office for Assistive
Services and Technology. Please specify which news release when placing
your request. Call 202.693.7773 or TTY 202.693.7755. |
