Labor Department Files Suit to Protect Participants of Abandoned Clifton, New Jersey Retirement Plan

Archived News Release — Caution: Information may be out of date.

Clifton, New Jersey - The U.S. Department of Labor has filed a lawsuit requesting that an independent fiduciary be appointed to distribute the assets of the 401 (k) plan of Data-Tech Institute, a defunct Clifton, New Jersey company. The plan has been without oversight since the company ceased operations in 1998.

“Companies that sponsor retirement plans have a legal responsibility to the employees who earnestly contribute to them,” says Jonathan Kay, director of the New York regional office of the department’s Employee Benefits Security Administration (EBSA), which investigated the case. “When a company goes out of business, that responsibility is not relinquished.”

The plan was abandoned when the company stopped doing business, and plan fiduciaries John Quagliana and Harry Smith stopped performing their duties without appointing another fiduciary. According to the suit, 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 September 2005, the plan had 39 participants and approximately $45,700 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. Data-Tech)
Civil Action No. 2:06 cv 01566 JCL-MF

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Archived News Release — Caution: Information may be out of date.

Contact Name: Leni Uddyback-Fortson
Phone Number: 215.861.5102