U.S. Labor Department Sues to Appoint Independent Fiduciary for Abandoned Retirement Plan

Archived News Release — Caution: Information may be out of date.

Kansas City, Missouri - The U.S. Department of Labor filed a lawsuit in U.S. District Court for the Western District of Missouri to obtain a court-appointed, independent fiduciary to manage the abandoned retirement plan of now-defunct Video Post Productions Inc. of Kansas City.

The department asked the court to appoint Lefoldt & Co. P.A., of Ridgeland, Mississippi, to be the independent fiduciary. The firm would be responsible for distributing $273,580 in assets to plan participants and terminating the plan.

The suit alleges that Video Post Productions did not formally terminate the plan or appoint a successor fiduciary to manage it after the company ceased operations in July 2003. Participants and beneficiaries were unable to obtain distributions of assets remaining in the plan.

“The law states that plans must be managed and operated by employers or plan fiduciaries. When plans are abandoned by all designated fiduciaries, they become orphan plans,” said Steven Eischen, director of the department’s regional office of the Employee Benefits Security Administration (EBSA). “Our case ensures that these workers and their families have someone with authority to appropriately conclude plan business and distribute its assets to eligible participants.”

Employers with similar problems, but not currently the subject of an EBSA investigation, may be eligible to participate in the department’s Voluntary Fiduciary Compliance Program (VFCP). Participation in the VFCP requires employers to correct any violations, but allows them to avoid EBSA enforcement actions and civil penalties as well as applicable excise taxes. For more information about the VFCP, see www.dol.gov/ebsa.

In fiscal year 2005, EBSA achieved monetary results of $1.7 billion related to pension, 401(k), health and other benefits for millions of American workers and their families.

Employers and workers can reach EBSA’s Kansas City regional office at 816.426.5131 or may 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. Video Post Productions Inc., 401(k) Profit Sharing Plan)
Civil Action No. 4:06-cv-309

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Archived News Release — Caution: Information may be out of date.

Contact Name: Norma J. Conrad
Phone Number: 816.426.5481