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Release Date: 08/02/2004
Release Number: 04-1461-BOS/BOS 2004-171
Contact Name: John M. Chavez
Phone Number: 617.565.2075
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Boston, Massachusetts - The U.S. Department of
Labor has obtained a consent judgment and order requiring the
administrator of a Medford, Massachusetts, 401(k) plan to pay $11,287.48,
plus interest, to plan participants as restitution for failing to forward
employee contributions to the plan. |
David
Santos, of Lynnfield, Massachusetts, president and owner of J.D. Graphics,
Inc., (doing business as Jonathan David Printing), a printing business,
served as trustee and named fiduciary of the company’s retirement plan.
According to a Labor Department lawsuit filed in the U.S. District Court
for Massachusetts, Santos failed to forward employee contributions to the
plan from June 2002 until October 2002, when J.D. Graphics ceased
operations. |
“Trustees
of a 401(k) plan have a responsibility to ensure that the assets of the
plan are used solely to benefit participants. One of the most important
responsibilities is putting money withheld from workers’ wages into
their 401(k) accounts,” said James Benages, Boston regional director of
the Labor Department’s Employee Benefits Security Administration (EBSA). |
Under
the consent judgment, Santos is prohibited from serving as trustee or
administrator of any plan covered by the Employee Retirement Income
Security Act (ERISA) in the future and ordered to restore the full amount
of employee contributions (plus interest) to the plan according to a
specified payment schedule. The restitution will be treated as a
nondischargeable debt in Santos’ bankruptcy proceeding. The amounts in
Santos’ own plan account will also be distributed to the other
participants to partially satisfy the restitution order. |
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. |
In
fiscal year 2003, EBSA achieved record monetary results of $1.4 billion
related to the pension, 401(k), health and other benefits of millions of
American workers and their families. This case was investigated by the
department’s regional EBSA office in Boston. Employers and workers can
contact the regional office at 617.565.9600 or call EBSA’s toll free
number, 1.866.444.EBSA (3272), for help with problems relating to
private-sector pension and health plans. |
(Chao
v. Santos)
Civil Action Number: 04-11580 |
U.S.
Labor Department news releases are accessible on the Internet at
www.dol.gov. 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 202.693.7765 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
www.dol.gov/compliance. |
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