U.S. Labor Department sues officer of Chicago healthcare group for failing to properly administer 401(k) plan

Archived News Release — Caution: Information may be out of date.

Chicago – The U.S. Department of Labor has sued a fiduciary of the 401(k) plan of Health Care Services Corp. in Chicago for failing to administer and terminate the plan so that assets could be distributed to plan participants.

“The Labor Department will act when fiduciaries fail to carry out their duty to protect retirement plan assets to pay future benefits to participants and their beneficiaries,” said Steve Haugen, director of the Chicago Regional Office of the department’s Employee Benefits Security Administration (EBSA).

The department’s lawsuit alleges that plan fiduciary Henry Zeisel failed to take responsibility for terminating the plan and distributing its assets to beneficiaries and participants after the company was dissolved in October 2003. The plan has more than $50,000 in assets and 10 participants. The suit seeks to appoint an independent fiduciary to manage the plan, terminate it and distribute assets to eligible participants and beneficiaries.

Employers with similar problems who are not yet the subject of investigations by EBSA may be eligible to participate in the department’s Voluntary Fiduciary Correction Program (VFCP). Participation in the VFCP requires employers to make workers whole but allows them to avoid EBSA enforcement actions and civil penalties as well as any applicable excise taxes. For more information about the VFCP, see www.dol.gov/ebsa.

The suit, filed in federal district court in Chicago, resulted from an investigation conducted by EBSA’s Chicago Regional Office. Employers and workers can reach the office at 312.353.0900 or toll-free at 1.866.444.EBSA (3272) for help with problems relating to private sector retirement and health plans. 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.

Chao v. Henry Zeisel
Civil Action Number 1:07-cv-05507

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Archived News Release — Caution: Information may be out of date.