March 28, 2014 (PLANSPONSOR.com) – The Department of Labor (DOL) has filed a lawsuit to remove and replace a 401(k) plan trustee for failing to perform his duties.
The DOL suit, Perez v. Edward J. Sajovic and the Edward J.
Sajovic Design LLC 401(k) Profit Sharing Plan (docket number: 1:14-cv-01922), filed in the U.S. District Court for the Eastern District of New York, says the 401(k) plan was established in
January 2011 to provide retirement benefits for employees of Edward J. Sajovic
Design LLC in the borough of Queens in New York. Edward
Sajovic and John Cuozzo were the plan trustees. John Hancock Financial Services
has been the custodian of the plan’s assets.
The DOL’s Employee Benefits Security Administration (EBSA) found
in April 2013, Sajovic sought and obtained Cuozzo’s removal as a plan
trustee, leaving Sajovic as the sole plan trustee. In May 2013, Cuozzo
requested that John Hancock roll over his eligible plan benefits to his
individual retirement account. To date, Sajovic has not authorized the rollover
for Cuozzo and for two other former employees who made the same request.
Sajovic’s failure to administer the plan on behalf of anyone but himself means
that Cuozzo and the plan’s other participants cannot obtain their plan assets, the DOL says.
Currently, the plan holds $118,678.82 in assets for seven participants.
The EBSA investigation also found Sajovic failed to
provide the plan’s third party administrator with the information necessary to
calculate the employer matching funds due to each participant in 2012, failed
to file a Form 5500 with the Internal Revenue Service for 2012 and took $30,000
in loans from his eligible plan benefits in 2013.
Due to Sajovic’s failure to perform his fiduciary duties, the
DOL lawsuit asks the court to remove him as plan trustee, bar him from serving
as a fiduciary to this and any other plan covered by the Employee Retirement
Income Security Act (ERISA), and order further relief where appropriate.
More information about the DOL suit can be