Compliance December 10, 2010

Company President to Restore Plan for Loan Repayments

December 10, 2010 (PLANSPONSOR.com) - The U.S. Department of Labor has obtained a consent judgment and order for Barstow Truck Parts and Equipment Co. and its president, James M. Rajacich Sr., to restore $118,249 to the company’s profit-sharing plan.
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The agreement resolves allegations by the department that Rajacich failed to repay $70,000 in participant and plan loans taken out of the plan in 1997. According to a DoL news release, Rajacich, who serves as a fiduciary of the plan, forfeited his own benefits from the plan as part of the settlement.    

The total amount to be restored to the plan includes the unpaid loan amounts, interest and loss of earnings that the $70,000 would have been expected to earn since 1997. The DoL is also assessing a civil money penalty of $23,650.   

“It’s critical that employers realize the money in employee benefit plan accounts isn’t there for personal or business use. It’s there for the employees to use in their hard-earned retirements,” said Crisanta Johnson, EBSA’s regional administrator in Los Angeles, in the press release.

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