U.S. Labor Department Sues to Appoint Independent Fiduciary For 401(k) Plan Abandoned by Batavia, New York Company

Archived News Release — Caution: Information may be out of date.

Buffalo, New York – The U.S. Department of Labor has filed a lawsuit asking the U.S. District Court for the Western District of New York to appoint an independent fiduciary to oversee the abandoned 401(k) plan of ELN of New York Inc.

The plan was sponsored by ELN of New York Inc. in Batavia, New York. As of about January 2005, plan trustee Cregg Paul abandoned the plan by failing to properly terminate it and distribute the assets to the rightful beneficiaries. The Employee Retirement Income Security Act (ERISA) requires employee benefit plans to be managed by named trustees. Without a trustee, plan participants and beneficiaries cannot obtain plan information or access accounts to make investments or collect retirement benefits.

The Labor Department’s suit asks the court to appoint an independent fiduciary to administer the plan, distribute its assets to plan participants and beneficiaries, and oversee the plan’s termination. As of May 2, 2005, the plan had 38 participants and $333,613 in assets. American Skandia Advisor Funds, Inc. is the custodian of the funds.

“When a plan is abandoned, so are the workers who invested in it,” said James Benages, regional director in Boston for the Labor Department’s Employee Benefits Security Administration (EBSA). “We took this legal action so the plan will be properly managed and its participants can access the funds that rightly belong to them.”

The suit resulted from an investigation conducted by EBSA’s regional office in Boston, which has jurisdiction for western New York. Employers and workers can contact that office at 617.565.9600 or EBSA’s toll free number, 1.866.444.EBSA (3272), for help with problems relating to private-sector pension and health plans.

(Chao v ELN of New York, Inc. 401(k) Plan)
Civil Action Number: 1:07-CV-00368-RJA

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Archived News Release — Caution: Information may be out of date.