U.S. Department of Labor Sues Defunct West Middlesex, Pennsylvania Company to Protect 401(k) Participants

Archived News Release — Caution: Information may be out of date.

West Middlesex, Pennsylvania - The U.S Labor Department has sued Coast to Coast Home Equity Corp. to obtain appointment of an independent fiduciary to distribute the assets of the company’s 401(k) plan to plan participants. The defunct West Middlesex, Pennsylvania company is currently in bankruptcy and ceased operations in May 2004.

An investigation conducted by the department’s Employee Benefits Security Administration found that since ceasing operations, the company has not taken fiduciary responsibility for the operation and administration of the plan and its assets, and has not appointed anyone to assume that responsibility. As a result, plan participants and beneficiaries have not been able to access their account balances.

Plans become “orphan plans” when they are abandoned by all fiduciaries designated to manage and operate them and their assets.

“The law states that plans must be managed and operated by employers or plan fiduciaries,” said Mabel Capolongo, director of the Philadelphia regional office of the department’s Employee Benefits Security Administration (EBSA) in Philadelphia. “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

The suit, filed in the U.S. District Court for the Western District of Pennsylvania, seeks to remove Coast to Coast from its position as fiduciary and have an independent fiduciary appointed to terminate the plan and distribute its assets to plan participants and beneficiaries. As of January 2006, the plan had 19 participants and $19,980 in assets.

The Labor Department’s legal action resulted from an investigation conducted by EBSA’s Philadelphia 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 Philadelphia office at 215.861.5300 or through its toll-free number, 1.866.444.EBSA (3272), for more information on the requirements of ERISA. Additional information can be found at www.dol.gov/ebsa.

(Chao v. Coast to Coast)
Civil Action No. 06-cv-01212

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Archived News Release — Caution: Information may be out of date.

Contact Name: Leni Uddyback-Fortson
Phone Number: 215.861.5102