U.S. Labor Department Sues to Protect 401(k) Funds of Bay Area Workers

Archived News Release — Caution: Information may be out of date.

San Francisco - The U.S. Department of Labor has filed suit in federal district court in San Francisco to return nearly $61,000 held in 401(k) profit sharing plan assets to 15 former employees of Zoltrix Inc., a defunct Fremont company.

The plan has been inactive since the company, a developer and manufacturer of computer products, ceased operations in 2001. The Labor Department has been unable to locate the company’s former president and CEO, Jimmy Wong, who was the sole person with legal authority to manage the plan. The lawsuit seeks to appoint an independent trustee to terminate the abandoned plan and distribute its assets to eligible participants.

“When a plan is abandoned, so are the workers, who cannot use or reinvest their funds for their retirement,” said Francis Clisham, regional director in San Francisco for the Labor Department’s Employee Benefits Security Administration (EBSA), which investigated the case. “We are committed to ensuring that participants can access the funds that rightly belong to them.”

In fiscal year 2006, EBSA achieved monetary results of $1.4 billion related to pension, 401(k), health and other benefits for millions of American workers and their families.

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 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. Zoltrix, Inc. 401(k) Profit Sharing Plan)
Civil Action 3:07-CV-00610-WHA

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Archived News Release — Caution: Information may be out of date.