U.S. Labor Department Sues Pocono Pines, Pennsylvania, Company Over 401(k) Retirement Savings Plan Violations

Archived News Release — Caution: Information may be out of date.

Philadelphia, Pennsylvania - The U.S. Labor Department has sued Austin James Associates Inc. (AJA), Pocono Pines, Pennsylvania, and its president, Curtis M. Herman, for failing to forward or timely remit employees’ contributions to the company’s 401(k) savings plan.

“This legal action was taken to protect the future retirement benefits owed the employees of this company,” said Mabel Capolongo, director of the Philadelphia regional office of the Employee Benefits Security Administration (EBSA).

The lawsuit alleges that Herman and AJA violated the Employee Retirement Income Security Act beginning in November 2001 when they deducted plan contributions from employee salaries but failed to remit or timely remit them to the plan. The suit also states that when deferral contributions were remitted to the plan late, AJA did not always add interest to the delinquent contributions.

The suit seeks a court order requiring the defendants to restore all losses, including lost opportunity costs. It also asks that Herman and AJA be removed as plan fiduciaries and that an independent fiduciary be appointed to manage the plan. In addition, the department asks that the company and Herman be permanently barred from serving as fiduciaries to any plan in the future.

Filed in the U.S. District Court for the Middle District of Pennsylvania, the suit resulted from an investigation conducted by EBSA’s Philadelphia regional office. 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). For more information, visit www.dol.gov/ebsa.

Employers and workers can reach the Philadelphia office at 215.861.5300 or toll-free at 1.866.444.EBSA (3272) for help with problems relating to private-sector retirement and health plans. In fiscal year 2005, EBSA achieved monetary results of $1.7 billion related to pension, 401(k), health and other benefits for millions of American workers and their families.

(Chao v. Curtis M. Herman)
Civil Action No. 3:06-cv-512

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Archived News Release — Caution: Information may be out of date.

Contact Name: Kate Dugan
Phone Number: 215.861.5101