U.S. Department of Labor as Pension Protectors

There was a time in this country when people could reasonably expect if they played by the rules, found a job, and worked hard until their retirement, they could retire with a pension that would afford them a modicum of dignity.  Alas, those jobs have become few and far between.  So if you’re one of the lucky few to land a job with a pension plan, you hate to think that those in charge of your company’s pension fund, and all that money that you and your coworkers have earned, might be using that money for their own profit.  That is exactly what the Elmhurst, IL based firm Results One Financial LLC is accused of doing.

The U.S. Department of Labor has sued Results One Financial LLC and Steven Salutric, co-founder and director of the investment management company, for allegedly withdrawing more than $1 million from five pension plan client accounts from 2005 through 2009. The lawsuit follows an investigation by the department’s Employee Benefits Security Administration into alleged violations of the Employee Retirement Income Security Act.

“These acts have jeopardized the retirement security of many workers,” said EBSA Assistant Secretary Phyllis C. Borzi. “It is particularly egregious when those charged with the responsibility of protecting workers’ benefits violate that trust by committing illegal acts for personal gain. The Labor Department will not stand for it, and we will take all actions necessary to make sure workers receive their hard-earned benefits.”

The suit, filed in federal district court in Chicago, alleges that Salutric misdirected the plan assets to entities in which he had a financial interest, including a film distribution company, a restaurant and a real estate partnership, as well as a church where he served as treasurer. The suit also asserts that Results One Financial LLC violated its fiduciary duties with respect to these transactions and that, as a co-fiduciary, the company is liable for the actions of Salutric due to a responsibility to monitor the actions of its staff.

The suit seeks a court order to require the defendants to restore all losses to the five pension plan clients and to correct the prohibited transactions involved. The employee benefit plan clients from which Salutric allegedly misdirected funds to unauthorized investment accounts include: Baker’s Buddy Inc. Employees Profit Sharing Plan; Howard Concrete Inc. 401(k) Plan; Kramer Tree Specialists Inc. Employees 401(k) and Profit Sharing Plan; RAMSCO Profit Sharing Plan; and Supreme Auto Transmissions Inc. Profit Sharing Plan. The suit also asks that Results One Financial LLC and Salutric be permanently barred from serving as fiduciaries or service providers to any plan governed by ERISA.