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Compliance December 10, 2010
Company President Ordered to Repay Loans
The U.S. Department of Labor is ordering Barstow Truck Parts and Equipment Co. President, James
M. Rajacich Sr., to restore $118,249 to the company’s profit-sharing
plan.
Reported by Rebecca Moore
The agreement resolves allegations by the DoL 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.