Labor Department Acts to Return $40,000 in 401(k) Assets To Former Employees of Bankrupt Oakland Company

Archived News Release — Caution: Information may be out of date.

San Francisco, California - An independent trustee will begin distributing the remaining funds from a now-defunct Oakland company’s “orphaned” 401(k) employee benefit plan under a default judgment against the AM-PM Service Company.

AM-PM ceased operating in February 2003 without appointing an individual to serve as a trustee or administrator of the plan. The business, which repaired machinery used to load and unload cargo vessels, filed for bankruptcy July 2002. The company abandoned the 401(k) plan after it went out of business.

Plans become “orphan plans” when they are abandoned by fiduciaries designated to manage and operate them and their assets. The judgment obtained by the U.S. Department of Labor appoints an independent trustee to administer the plan, distribute approximately $40,000 in assets to 10 remaining plan participants, and oversee the plan’s termination.

“Abandoning the plan results in abandoning the workers who invested in it,” said Francis C. Clisham, regional director for the Labor Department’s Employee Benefits Security Administration (EBSA) in San Francisco. “We took this legal action so the plan participants can access their retirement funds.”

New Labor Department rules took effect on May 22 that facilitate a voluntary, safe and efficient process for winding up the affairs of abandoned plans. The new rules allow financial institutions to take responsibility and distribute the assets of 401(k) plans to affected workers and their families. The department estimates that 1,650 such plans are abandoned each year. Information about the new rules is available under the Abandoned Plan Program section of EBSA’s Web site at www.dol.gov/ebsa.

The legal action resulted from an investigation conducted by EBSA’s San Francisco regional office. 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 contact the agency’s San Francisco office at 415.975.4600 or EBSA’s toll-free number, 1.866.444.EBSA (3272), for help with problems relating to private-sector pension and health plans.

(Chao v. AM-PM Service Co., Inc. 401(k) Plan)
Civil Action No. C06-1220-MMC

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Archived News Release — Caution: Information may be out of date.

Contact Name: Roger Gayman
Phone Number: 415.975.4742