Labor Department Sues to Assist Retirement Plan Participants Of Defunct Delaware Company

Archived News Release — Caution: Information may be out of date.

Philadelphia, Pennsylvania - The U.S. Department of Labor has sued IT Factory Solution Inc. (ITFS), a defunct Delaware corporation, asking the court to appoint an independent fiduciary to terminate the company's retirement plan and distribute its assets to participants and beneficiaries.

ITFS became plan trustee and administrator when it acquired Solutions By Design Inc., the Virginia company that started the plan.

An investigation, conducted by the Washington, D.C., district office of the department's Employee Benefit Security Administration (EBSA), determined that ITFS did not take fiduciary responsibility, when it ceased operations in December 2001, for the continued operation and administration of the plan and its assets. The company also failed to appoint anyone to assume that responsibility. Plan participants and beneficiaries have not been able to access their individual account balances since that time.

"When a plan is abandoned, so are the workers who invested in it," said Mabel Capolongo, EBSA regional director in Philadelphia. "We took this action to ensure that plan participants will be able to access the funds that are rightfully theirs."

Plans become "orphan plans" when they are abandoned by all fiduciaries designated to manage and operate them, leaving participants without a way to transact business or communicate with the plan.

Filed in the U.S. District Court for the District of Delaware, the suit seeks to appoint a court-approved independent fiduciary to administer the termination of the plan and the distribution of plan assets. As of February 2005, the plan had 68 participants and $1,040,908 in assets.

Employers and workers can reach EBSA's Washington, D.C. district office at 301.713.2000 or can contact EBSA's toll-free number, 1.866.444.EBSA (3272), for help with problems relating to private-sector retirement and health plans.

(Chao v. IT Factory Solution, Inc.)
Civil Action No. 1:05-cv-843

U.S. Department of Labor news releases are accessible on the Department's Newsroom page. The information in this news release will be made available in alternate format upon request (large print, Braille, audio tape or disc) from the COAST office. Please specify which news release when placing your request at 202.693.7765 or TTY 202.693.7755. The U.S. Department of Labor is committed to providing America's employers and employees with easy access to understandable information on how to comply with its laws and regulations. For more information, please visit the Department's Compliance Assistance page.

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