U.S. Labor Department Sues Baltimore Co. for Failing to Distribute 401(K) Funds After It Went Out of Business

Archived News Release — Caution: Information may be out of date.

Baltimore - The U.S. Labor Department has sued the King Tile Co., Baltimore, Maryland, for failing to administer and terminate the company’s 401(k) plan so that assets could be distributed to plan participants.

“The department took legal action to ensure that the participants received their promised benefits,” said Mabel Capolongo, director of the department’s Philadelphia regional office of the Employee Benefits Security Administration (EBSA).

The lawsuit alleges that the ceramic tile business, which served as plan administrator and fiduciary, failed to take responsibility for terminating the plan and distributing its assets to participants and beneficiaries when the company ceased doing business in 2003.

The suit seeks to appoint an independent fiduciary to manage the plan, terminate it and distribute the assets to eligible participants and beneficiaries. The suit, filed in federal district court in Baltimore, resulted from an investigation conducted by EBSA’s Philadelphia office.

To assist workers in similar situations, 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 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.

Employers and workers with questions or concerns regarding their private-sector pension and health plans can contact EBSA’s Philadelphia office at 215.861.5300 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.

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.

(Chao v. The King Tile Company)
Civil Action No. 1:06-cv-3062

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Archived News Release — Caution: Information may be out of date.

Contact Name: Kate Dugan
Phone Number: 215.861.5101