Labor Department's Consent Judgment Orders Pension Plan Sponsor to Resume Duties and Pay Participants

Archived News Release — Caution: Information may be out of date.

The U.S. Department of Labor has obtained a consent judgment requiring the plan administrator of the Carroll (Iowa) Manufacturing Inc. 401(k) plan to resume his duties as trustee of the plan and to retain American Trust of Dubuque, Iowa as a third-party administrator to assist him in fulfilling his obligations to the plan.

Patrick Malloy has been ordered to perform all duties necessary to assist in the administration of the 401(k) plan of his now defunct company, including but not limited to making distributions to the plan’s participants and eventual termination of the plan.

According to the lawsuit, when Carroll Manufacturing, Inc. (CMI) ceased doing business, Malloy and other named trustees abandoned all administrative and fiduciary duties associated with the plan. Participants and beneficiaries have been unable to obtain distributions from their individual account balances in the plan. Such plans are considered by the Labor Department to be orphan plans when they are abandoned by plan fiduciaries designated to manage and operate the plans and their assets.

Carroll Manufacturing was a manufacturing firm, located in Carroll, Iowa. Its plan had 25 participants and funds totaling $40,868.35 on January 31, 1997.

“Our goal is to assure that consumers know the department is only a phone call away to help protect the benefits promised by employers,” said Gregory P. Egan, director of the Kansas City Regional Office of the department’s Pension and Welfare Benefits Administration, which conducted the investigation. “Employers and workers can reach us in at 816.426.5131 for help with any problems relating to pension and health plans provided in the private sector.”

The lawsuit was filed on April 23 in the federal district court in the Northern District of Iowa in Sioux City. The consent judgment was entered on April 25.

(Chao v. Patrick Malloy and Carroll Manufacturing, Inc.
Civil Action No. 01-3047 MWD)

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Archived News Release — Caution: Information may be out of date.