Plaintiff HILDA L. SOLIS, Secretary of Labor, United States Department of Labor ("Secretary") pursuant to her authority under §§ 502(a)(2) and (5) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. 1132(a)(2) and (5), has filed a Complaint against Defendants BARSTOW TRUCK PARTS AND EQUIPMENT CO., INC., a corporation ("Company"), JAMES M RAJACICH SR., an individual ("Rajacich"), and the BARSTOW TRUCK PARTS & EQUIPMENT COMPANY, INC., PROFIT SHARING PLAN, an employee pension benefit plan ("the Plan").*fn1
A. The Secretary, the Company, Rajacich, and the Plan (collectively, "the parties") admit that the Court has jurisdiction over this action pursuant to ERISA § 502(e)(1), 29 U.S.C. § 1132(e)(1), and that venue lies in the United States District Court, Central District of California pursuant to ERISA § 502(e)(2), 29 U.S.C. § 1132(e)(2).
B. Without admitting or denying the violations alleged in the Complaint and solely as a compromise, the parties agree to the entry of this Consent Judgment & Order. The parties further agree that this Consent Judgment & Order shall fully settle all claims of the Secretary asserted in the Complaint.
IT IS HEREBY ORDERED, ADJUDGED, and DECREED that:
1. Defendants Company and Rajacich are jointly responsible for restoring $118,248.75 in losses and lost opportunity costs ("Amount Due") to the Plan.
2. Defendant Company and Rajacich shall restore the Amount Due as set forth in this paragraph:
a. The governing Plan Documents are hereby amended to allow for the offset of a participant's Plan benefits against an amount that the participant is required to pay as a result of this Consent Judgment.
b. Pursuant to ERISA Section 206(d)(4), 29 U.S.C. § 1056(d)(4), and within ten (10) days of the entry of this Consent Judgment, the Company and Rajacich shall restore the Amount Due, in part, by offsetting the entire individual participant Plan account balance of Rajacich and reallocating such balance to the other participants' Plan accounts in accordance with the allocation method described in Subparagraph 2g below. Evidence of the completed reallocation to the participants' accounts of all participants other than Rajacich shall be provided to the Secretary within five (5) days of the reallocation.
c. Within ten (10) days of the entry of this Consent Judgment, IRS Form 1099Rs shall be issued by the Plan to Rajacich for the offset amount described in subparagraph 2b above. Copies of the Form 1099Rs shall be provided to the Secretary within five (5) days of the issuance of the Form 1099Rs.
d. To restore the balance of the Amount Due remaining after the subtraction of the offset described in Subparagraph 2b ("Remaining Balance"), the Company and Rajacich shall, by January 1, 2011, make an initial down payment to the Plan in an amount equal to 20% of the Remaining Balance.
e. Following the restoration of the down payment described in Subparagraph 2d, the Respondents shall make eleven (11) subsequent, equal payments to the Plan. These payments shall be made on the first day of each month for eleven (11) months, beginning on February 1, 2011, and ending on December 1, 2011.
f. Evidence of the restoration of the down payment and the subsequent monthly payments made to the Plan pursuant to Subparagraphs 2d and 2e shall be provided to the Secretary within twenty (20) days of each payment. In addition, the Company and Rajacich shall provide the Secretary with any other documentation necessary to corroborate the restoration of the Amount Due as contemplated by this Consent Judgment.
g. All restorations of the Amount Due, including all payments made to the Plan and the offset of Rajacich's Plan account balance set forth in Subparagraphs 2d, 2d and 2e, shall be allocated to the participants' individual Plan accounts, excluding the Plan account of Rajacich, in the same proportion as each such account has to the total balance of all non-fiduciary participants' accounts in the Plan. No amounts restored shall be allocated to Rajacich's Plan account.
h. Should the Company and Rajacich fail to timely comply with any requirements set forth in this Paragraph, the remaining balance of the Amount Due at the time of non-compliance shall become immediately due and payable. Interest will continue to accrue ...