Labor Department Obtains Court Order Barring Minneapolis Area Executive from Serving as Fiduciary on Retirement Plans

Archived News Release — Caution: Information may be out of date.

Minneapolis, Minnesota - The U.S. Department of Labor obtained a default judgment against Paul J. Johnson from serving as a fiduciary to any plan governed by the Employee Retirement Income Security Act (ERISA) and removing him as fiduciary of the Jerome Johnson Excavating Profit Sharing Plan, Maple Plain, Minnesota.

A recent settlement of related actions involving the profit sharing plan resulted in the distribution of $56,829 to plan participants and the recovery of $975, including lost interest that Johnson failed to forward to the plan even though the funds were withheld from workers’ paychecks.

The Labor Department’s Employee Benefits Security Administration (EBSA) opened an investigation into the plan after Johnson failed to properly fulfill his duties as a fiduciary, thereby allowing the plan to become orphaned. Plans become orphan plans when they are abandoned by all fiduciaries designated to manage and operate them and their assets. As a result of the abandonment, participants and beneficiaries were unable to communicate with the plan fiduciary or obtain distributions from their accounts.

“The department acts quickly to help workers get their benefits when plan assets are either misused or their plans are abandoned,” said Steve Eischen, director of the department’s Kansas City regional office of EBSA.

Employers and workers can reach EBSA’s Kansas City regional office at 816.426.5131. Help with problems relating to private-sector retirement and health plans can also be obtained by calling EBSA’s toll-free number 1.866.444.EBSA (3272). 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. Johnson)
Civil Action No. 05-2452

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Archived News Release — Caution: Information may be out of date.

Contact Name: Brad Mitchell
Phone Number: 312.353.6976