U.S. Labor Department Sues to Appoint Trustee for Abandoned San Jose 401(k) Plan

Archived News Release — Caution: Information may be out of date.

San Francisco, California - The U.S. Department of Labor has filed a lawsuit in federal district court in San Jose seeking the appointment of an independent trustee to manage the abandoned 401(k) plan of Silicon Valley Research, Inc., and distribute more than $900,000 in assets to 28 participants.

The department’s suit asks the court to appoint a trustee with independent authority to manage the plan, distribute its assets to eligible plan participants and beneficiaries and oversee the plan’s termination. The company, formerly of San Jose, California, developed and marketed software and ceased doing business in late 2002. After it went out of business, the company failed to administer, terminate, and wind up the plan. As of March 2004, the plan had approximately $916,718 in assets under the custodianship of John Hancock Insurance.

“When a plan is abandoned, so are the workers who invested in it,” said Ann L. Combs, Assistant Secretary of Labor of the Labor Department’s Employee Benefits Security Administration (EBSA). “We are committed to helping workers regain access to their retirement assets.”

To assist workers in similar situations, the Labor Department has published rules to facilitate a voluntary, safe and efficient process for winding up the affairs of abandoned plans. The new rules, which went into effect on May 22, 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 department’s suit 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 with questions or concerns regarding their private-sector pension and health plans can contact EBSA’s regional office in San Francisco at 415.975.4600 or EBSA’s toll free number, 1.866.444.EBSA (3272).

(Chao v. Silicon Valley Research, Inc. Savings and Investment Plan)
Civil Action No. c06-05021

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Archived News Release — Caution: Information may be out of date.

Contact Name: David James/Gloria Della
Phone Number: 202.693.4676/202.693.8664