Labor Department Sues Ill. Company Over Abandonment Of Profit Sharing Plan

Archived News Release — Caution: Information may be out of date.

The U. S. Department of Labor has sued defunct Asahi Service, Inc. of Des Plaines, Ill., for failure to appoint a successor trustee to terminate the plan and distribute its assets to plan participants.

Plans become "orphan plans" when they are abandoned by all plan fiduciaries designated to manage and operate the plans and their assets. As a result, participants and beneficiaries are unable to receive pension distributions and to make inquiries about their benefits.

Asahi Service, Inc. was in the business of film development and servicing cameras. The company was involuntarily dissolved by the State of Illinois on May 1, 1999. The profit-sharing plan was created in 1992 by Asahi Service, Inc. However, the plan became an orphan plan in July 1998 upon the death of Noboru Tanaka, the plan's sole trustee. As of Sept. 30, 1997, the plan covered 17 participants and had assets of $117,401.57.

The Labor Department's complaint alleges that Asahi violated the Employee Retirement Income Security Act (ERISA) by leaving the plan without a trustee, failing to appoint a successor trustee to administer the plan, and failing to terminate the plan and distribute individual account balances to participants.

As relief, the lawsuit seeks a court order to require removal of the company from its position with the plan and appointment of an independent fiduciary to manage the plan and distribute its assets. “Our goal is to assure that consumers know that the department is only a phone call away to help protect the benefits promised by employers," said Ken Bazar, director of the Chicago Regional Office of the Labor Department’s Pension and Welfare Benefits Administration (PWBA). “Employers and workers can reach us at (312) 353-0900 for help with any problems relating to private-sector pension and health plans.”

The lawsuit, filed on May 30, 2000 in federal district court in Northen District of Illinois in Chicago, resulted from an investigation conducted by the Chicago Regional Office of the department's Pension and Welfare Benefits Administration into alleged violations of ERISA.

(Herman v. Asahi Service, Inc.)
Civil Action No. 00C3276

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Archived News Release — Caution: Information may be out of date.