U.S. Department of Labor Files Suit Against Burlington, New Jersey Towing Company To Protect 401(k) Plan Participants

Archived News Release — Caution: Information may be out of date.

Burlington, New Jersey - The U.S. Labor Department sued Russell Johnson and Shellene Barker, trustees of the Johnson Specialized Transportation, Inc. 401(k) Plan, for allegedly failing to forward more than $36,000 in employee and matching employer plan contributions plus lost opportunity costs to the plan.

An investigation conducted by the department’s Employee Benefits Security Administration (EBSA) determined that from the time the plan was established in October 2001 through the time it was frozen in 2003, the defendants failed to forward many contributions or take reasonable steps to collect contributions owed to the plan from Johnson Transportation.

“This action demonstrates the department’s commitment to protect the retirement benefits of America’s workers,” said Mabel Capolongo, director of the Philadelphia regional EBSA office.

The suit, filed in the U.S. District Court for the District of New Jersey, seeks to restore to the plan all losses with interest, remove Johnson and Barker as fiduciaries to the plan, appoint an independent fiduciary over the plan, and permanently bar the defendants from serving as fiduciaries or service providers to any ERISA-covered plan.

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 regional office at 215.861.5300 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 2005, EBSA achieved monetary results of $1.7 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.: 1:06-cv-04245

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Archived News Release — Caution: Information may be out of date.

Contact Name: Leni Uddyback-Fortson
Phone Number: 215.861.5102