Labor Department Sues to Appoint Independent Fiduciary for Abandoned Kearny, N.J., Retirement Plan

Archived News Release — Caution: Information may be out of date.

Kearny, New Jersey - The U.S. Department of Labor has sued to appoint Jacqueline Carmichael as an independent fiduciary authorized to manage the 401(k) plan of Universal Freight Systems, a defunct corporation headquartered in Kearny, New Jersey. The plan has been without oversight since the company ceased doing business in February 2002.

“This action is another example of our commitment to protect the hard-earned benefits earnestly entrusted to employers by American workers,” says Jonathan Kay, director of the New York regional office of the department’s Employee Benefits Security Administration (EBSA), which investigated the case.

The plan was abandoned after trustees James and John Catania were convicted of passing bad checks and bank fraud respectively, and were no longer able function as plan fiduciaries. According to the suit, no other trustee or fiduciary was designated, and plan participants and beneficiaries have been unable to access their individual account balances.

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 and communicate with the plan.

As of April 2006, the plan had seven participants and approximately $26,664 in assets.

Employers and workers can reach EBSA’s New York regional office at 212.607.8600 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. Universal Freight Systems 401(k) Plan)
Civil Action No.: CV-00236 (HAA-MF)

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Archived News Release — Caution: Information may be out of date.

Contact Name: Leni Uddyback-Fortson
Phone Number: 215.861.5103