U.S. Department of Labor obtains default judgment appointing independent fiduciary for abandoned Georgia 401(k) plan
Atlanta – The U.S. Department of Labor has obtained a default judgment appointing M. Larry Lefoldt as the independent fiduciary for the 401(k) plan of defunct TDH Enterprise Corp. of Morrow, Georgia.
The judgment also removes TDH as a fiduciary to the plan and bars it from violating the provisions of the Employee Retirement Income Security Act. When TDH ceased operations in July 2005, the automotive repair company failed to terminate the plan and ensure that funds were distributed to participants. Another fiduciary to the plan, Barry Grosselin, has failed to administer the plan since that time.
“Even though the defendant has abandoned this plan, the Labor Department will not abandon the employees who count on these funds for their retirement,” said R.C. Marshall, regional director of the Labor Department’s Employee Benefits Security Administration (EBSA) in Atlanta.
The court order directs the independent fiduciary to assume control of the plan, including all assets, with the intention of terminating it and distributing any remaining assets to the plan participants. As of October 2006, the latest data available, the plan had five participants and $12,669 in assets.
Employers and workers can reach EBSA’s Atlanta Regional Office at 404.302.3900 or toll-free at 866.444.3272 for help with problems relating to private sector retirement and health plans. In fiscal year 2007, EBSA achieved monetary results of $1.5 billion related to pension, 401(k), health and other benefits for millions of American workers and their families.
Chao v. TDH Enterprise Corp.
Civil Action File Number 1:07-cv-1764-JEC
"Suddenly Simply Having a Plan is Not Enough"
U.S. Labor Department sues to appoint independent fiduciaries to protect assets of abandoned 401(k) plans of Bay Area companies
San Francisco – The U.S. Department of Labor has sued Vigilance, Inc. of Sunnyvale, California, and its subsidiary Harmony Software Inc. of San Mateo, to obtain the appointment of independent fiduciaries to manage and distribute approximately $580,565.22 in assets to participants covered by the two companies’ abandoned 401(k) plans.
Separate lawsuits were filed against the Vigilance and Harmony Software in U. S. District Court for the Northern District of California, each alleging that the company failed to provide for the continued administration of its 401(k) plan. The suits seek removal of each company as fiduciary to its plan and the appointment of an independent fiduciary to terminate the plan and distribute its assets to participants and beneficiaries.
Both companies have ceased operations. Vigilance was a supplier of event software and Harmony Software was a business management software company.
Under the Employee Retirement Income Security Act (ERISA), employee benefit plans must be managed by named fiduciaries. In the absence of a plan fiduciary, participants and beneficiaries cannot obtain plan information, make investments or collect retirement benefits.
“The Department of Labor is committed to doing everything we can to assist workers whose plans are abandoned,” said Bradford P. Campbell, Assistant Secretary of the Labor Department’s Employee Benefits Security Administration (EBSA). “This legal action paves the way for the plan’s participants to receive retirement assets due them.”
The lawsuits resulted from investigations conducted by EBSA’s regional office in San Francisco. Employers and workers can contact the office at 415.625.2481 or toll-free at 866.444.3272 for help with problems relating to private sector pension and health plans. In fiscal year 2007, EBSA achieved monetary results of $1.5 billion related to pension, 401(k), health and other benefits for millions of American workers and their families. Additional information can be found at www.dol.gov/ebsa.
Chao v. Vigilance, Inc. (Civil Action No. CV-08-5083)
Chao v. Harmony Software, Inc. (Civil Action No. CV-08-5084)
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