U.S. Labor Department reaches agreement with Columbus, Ohio, business to recover contributions to company 401(k) plan

Archived News Release — Caution: Information may be out of date.

Columbus, Ohio – The U.S. Department of Labor has reached agreement with John P. Verhoff and Aaron K. Gaynor, officers of Precise Mechanicals Inc., Columbus, to restore employee contributions to the company-sponsored 401(k) plan.

The consent judgment reached in federal district court in Cincinnati, Ohio, calls for Verhoff and Gaynor to restore $10,065.25 to the plan’s participants. The judgment resolves a Labor Department lawsuit filed against the two company officers for allegedly failing to remit employee contributions to the plan and commingling those funds, deducted from employees’ paychecks, in a corporate account.

“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 Employee Benefits Security Administration (EBSA) Cincinnati Regional Office.

The suit alleges that Verhoff and Gaynor, fiduciaries of the plan, and president and vice president of the company respectively, violated the Employee Retirement Income Security Act when they failed to remit and segregate employee contributions owed to the plan that were deducted from workers’ paychecks.

Employers with similar problems who are not yet the subjects of EBSA investigations may be eligible to participate in the department’s Voluntary Fiduciary Correction Program (VFCP). Participation 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, see www.dol.gov/ebsa.

Employers and workers can reach EBSA’s Cincinnati Regional Office 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 2007, EBSA achieved monetary results of $1.5 billion related to pension, 401(k), health and other benefits for millions of American workers and their families.

Chao v. Verhoff
Civil Action Number 2:07cv883

U.S. Department of Labor news releases are accessible on the Department's Newsroom page. The information in this news release will be made available in alternate format upon request (large print, Braille, audio tape or disc) from the COAST office. Please specify which news release when placing your request at 202.693.7828 or TTY 202.693.7755. The U.S. Department of Labor is committed to providing America's employers and employees with easy access to understandable information on how to comply with its laws and regulations. For more information, please visit the Department's Compliance Assistance page.

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