U.S. Labor Department Obtains Agreement Restoring Assets to Abandoned Utah 401(k) Plan

Archived News Release — Caution: Information may be out of date.

St. George, Utah - The U.S. Department of Labor has reached an agreement with the president of St. George, Utah-based Marketing Solutions International Inc. (MSI) restoring $17,161.76 in assets and interest owed to the company’s 401(k) plan.

MSI President Kory Thurston, under a court stipulation, agreed to assist the plan’s third party administrator in terminating the plan and distributing its assets. Filed October 3, 2005 in federal district court in Salt Lake City, the department’s lawsuit alleged that Thurston violated the Employee Retirement Income Security Act (ERISA) by failing to remit employee contributions to the plan from January 25, 2003 to October 25, 2003. At the time of the improper transactions, MSI was the plan’s administrator. The defendants also abandoned the plan and failed to terminate it and properly distribute its assets to participants.

“This case demonstrates the department’s commitment to take action to protect the benefits promised to workers,” said Francis C. Clisham, regional director of the department’s Employee Benefits Security Administration (EBSA) in San Francisco. “Employee benefit law requires plans to be managed and operated by employers or plan fiduciaries and our case ensures that these workers and their families have someone with authority to transact plan business and distribute its assets to eligible participants.”

MSI was a telemarketing company that marketed educational materials and services for home-based businesses, which ceased operations around October 2002. The plan covered 29 participants and held approximately $26,068 in assets at that time.

Plans become orphan plans when they are abandoned by all fiduciaries designated to manage and operate them, leaving participants without a way to transact business and communicate with the plan. 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 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.

Employers and workers can reach EBSA’s San Francisco office at 415.975.4600. Help with problems relating to private-sector retirement and health plans can also be obtained by calling EBSA’s toll-free number, 1.866.444.EBSA (3272).

(Chao v. Kory Thurston)
Civil Action No. 05-CV-00828

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Archived News Release — Caution: Information may be out of date.

Contact Name: Rich Kulczewski
Phone Number: 303.844.1302