Oak Brook, Illinois Pension Plan Trustee Sued Over Failure To Pay Participants Their Account Balances

Archived News Release — Caution: Information may be out of date.

Chicago, Illinois - The U.S. Department of Labor sued Humesco, Inc., formerly of Oak Brook, Illinois, and Robert G. Hershenhorn, the trustee of its retirement savings plan, for failing to pay individual account balances to participants and beneficiaries since the human resource/employee leasing company went out of business in 1998.

Plans become orphan plans when they are abandoned by 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.

According to the department’s complaint, filed April 24 in federal district court for the Northern District of Illinois, Hershenhorn allegedly has not authorized distributions and/or rollovers to the various plan participants from the plan trust account since July of 1998 and the plan has not been formally terminated. The lawsuit also alleges the company as the plan administrator did not administer, liquidate or distribute the plan’s assets.

The plan had 15 participants with vested account balances totaling $45,373.36 as of March 31, 2001. Since the corporation was dissolved by the Illinois Secretary of State on June 30, 1998, certain participants and beneficiaries have been unable to obtain their distributions from their individual account balances. The last distribution occurred in July of 1999 and several participants have not obtained distributions since January 1, 1997.

The department is asking that Humesco and Hershenhorn be removed from their positions as fiduciaries to the plan and that an independent fiduciary be appointed to administer the plan to effect its termination and to distribute plan assets to participants and beneficiaries.

The complaint is the result of an investigation conducted by the Chicago Regional Office of the Pension and Welfare Benefits Administration, which oversees the fiduciary violations of the Employee Retirement Income Security Act (ERISA).

(Chao v. Humesco, Inc. and Robert G. Hershenhorn
Civil Action No. CV 01C2925)

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Archived News Release — Caution: Information may be out of date.