U.S. Labor Department Sues Cleveland Business Executive to Restore Delinquent Contributions to Company’s Retirement Savings Plan

Archived News Release — Caution: Information may be out of date.

Cleveland - The U.S. Department of Labor has sued Robert L. Johnson, president of the Jared Group in Cleveland, for failing to forward employee contributions to the company’s retirement plan and to segregate plan contributions from the general operating assets of the company.

“The department will act when plan fiduciaries fail to carry out their duty to protect the retirement plan assets held on behalf of participants,” said Joseph Menez, director of the department’s regional office in Cincinnati of the Employee Benefits Security Administration (EBSA).

The lawsuit alleges that Johnson violated the Employee Retirement Income Security Act (ERISA) by failing to remit contributions deducted from employees’ paychecks to the retirement plan in a timely manner, if at all, during periods from January 2001 through December 2004 when the company ceased business operations. Johnson also failed to maintain a fidelity bond as required by ERISA.

The suit seeks a court order requiring the defendant to restore plan losses resulting from fiduciary breaches and to correct any prohibited transactions. The suit also asks the court to permanently bar Johnson from serving as a fiduciary to ERISA-covered plans and to appoint an independent fiduciary to terminate the plan and distribute its assets to the plan's participants and beneficiaries.

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 any applicable excise taxes. For more information about the VFCP, see www.dol.gov/ebsa.

Employers and workers can reach the EBSA regional office in Cincinnati at 859.578.4680 or through EBSA’s toll-free number, 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 No. 1:07cv00653

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Archived News Release — Caution: Information may be out of date.