Judgment Clears Way for U.S. Labor Department to Return Almost $47,000 in 401(k) Funds to Bay Area Workers

Archived News Release — Caution: Information may be out of date.

San Francisco, California - A U.S. District Court judge has approved a default judgment against the trustees of the 401(k) plan of Promatis Corp., a defunct San Ramon, California-based company. The judgment clears the way for distribution of the plan’s assets to four eligible participants.

The action, filed in federal district court in San Francisco, orders appointment of an independent trustee to wind up the company’s abandoned 401(k) plan. It also removes the plan’s trustees, Thomas Kessler and Sebastian Graf, former company executives who left the country without terminating the plan. The firm ceased doing business in early 2002, was headquartered in Germany and had no other U.S.-based operations.

“We are pleased that the court will make it possible for us to return this money to the employees who invested in this plan,” said Francis Clisham, regional director of the Labor Department’s Employee Benefits Security Administration (EBSA) in San Francisco, which investigated the case. “The former employees who contributed to this 401(k) will now be free to reinvest their funds or use them for their retirement as planned.”

As of April 2005, the plan had four participants and $46,866 in assets under the custodianship of ING. In fiscal year 2005, EBSA achieved record monetary results of $1.7 billion related to pension, 401(k), health and other benefits for millions of American workers and their families.

To assist workers, the Labor Department instituted new rules last May to 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.

The court action resolves a lawsuit that resulted from an investigation conducted by EBSA’s San Francisco regional office. Employers and workers with questions or concerns regarding their private-sector pension and health plans can contact the EBSA regional office in San Francisco at 415.975.4600 or EBSA’s toll free number, 1.866.444.EBSA (3272). Information is also available from the agency’s Web site at www.dol.gov/ebsa.

(Chao v. Promatis Corporation 401(k) Plan)
Civil Action No. 3:06-cv-00633

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Archived News Release — Caution: Information may be out of date.

Contact Name: Deanne Amaden
Phone Number: 415.975.4741