Labor Department Sues Northfield, Illinois 401(k) Trustee For Misusing Pension Assets

Archived News Release — Caution: Information may be out of date.

Chicago, Illinois - A Northfield, Illinois, company and its 401(k) plan trustee were sued by the U.S. Department of Labor for failing to segregate and remit $8,669.04 in employee contributions to the plan, which also is owed lost opportunity costs.

The suit, filed January 25 in federal district court in Chicago, alleges that Design Personnel, Inc. and trustee William P. Harding, Jr. failed to forward the voluntary employee contributions from February to October 1999. The defendants also did not forward another $25,384.28 in employee contributions to the plan in a timely manner from January to May 1999.

The defendants also allegedly commingled the employee contributions with the general assets of the company in violation of the Employee Retirement Income Security Act (ERISA).

The suit seeks to have the defendants permanently barred from serving as fiduciaries to any employee benefit plan covered by ERISA, to recoup losses to the plan resulting from the violations and, if necessary, for Harding’s individual plan account to be used to assist in retrieving funds for other participants in the plan.

The plan had 61 participants and a total of $198,877 in plan assets as of December 31, 1999. The company is engaged in the personnel leasing industry and has affiliated companies, Design Printing and Warehouse Services, Inc. in Northfield, and Design Electric Service, Inc. in Bristol, Wisconsin, whose employees participated in the 401(k) plan.

The complaint is the result of an investigation by the department’s Chicago Regional Office of the Pension and Welfare Benefits Administration, which has oversight of fiduciary standards of the federal pension law.

(Chao v. Design Personnel, Inc.
Civil Action No. 02c0654 (Judge Gettleman))

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Archived News Release — Caution: Information may be out of date.