Labor Department Seeks Independent Fiduciary for 401(k) Plan Of Defunct New York City Firm

Archived News Release — Caution: Information may be out of date.

New York, New York - The U.S. Department of Labor filed a lawsuit on March 24 to appoint an independent fiduciary to replace a trustee of the 401(k) plan of defunct Pinay Flooring Products, Inc. of Brooklyn, New York, after the plan was abandoned.

“Our goal is to protect employees’ hard-earned benefits," said Francis Clisham, director of the New York regional office of the department’s Employee Benefits Security Administration (EBSA), formerly the Pension and Welfare Benefits Administration. “When we find these abandoned plans, we want to terminate the plans and have the participants’ account balances distributed to them.”

Plans generally become "orphan plans" when they are abandoned by plan fiduciaries designated to manage and operate the plans and their assets. Without plan fiduciaries, participants and beneficiaries are unable to receive retirement distributions or to make inquiries about their benefits. In this case, one of the two plan-required trustees has failed to perform his duties and the same circumstances have resulted.

Walter Ruttgeizzer and Joseph Pavia were the sole trustees of the plan since 1994. The lawsuit alleges that since August 9, 2001, Pavia, company vice-president, has refused to perform his duties as prescribed by the plan. The plan requires joint administration by the two trustees. Company President Ruttgeizzer shut down the company March 5, 2002, and has had sole responsibility for governing the plan, which has not been terminated.

The plan covered seven participants and held in excess of $418,000 as of March 2002.

The suit, filed on March 24 in federal district court in Brooklyn, resulted from an investigation conducted by EBSA’s New York Regional Office into alleged violations of ERISA. Employers and workers can contact the regional office at 212.607.8600 or EBSA’s toll free number, 1.866.444.EBSA (3272), for help with any problems relating to private-sector pension and health plans.

(Chao v. Pinay Flooring Products, Inc. Profit Sharing Plan)
Civil Action No. 03-1409

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Archived News Release — Caution: Information may be out of date.