U.S. Labor Department sues Minnesota business to distribute 401(k) retirement benefits to employees

Archived News Release — Caution: Information may be out of date.

Minneapolis – The U.S. Department of Labor has filed a lawsuit against Allstate Home Mortgage and the Allstate Home Mortgage 401(k) Plan and Trust in order to replace the plan’s sole fiduciary with an independent fiduciary to terminate the abandoned plan and distribute its assets to eligible participants and beneficiaries.

“The Labor Department filed suit so that an independent fiduciary can be named in order to terminate the plan and distribute assets to the participants and beneficiaries. The independent fiduciary also is needed to conclude any matters connected with the proper termination of the plan,” said Steven R. Eischen, director of the department’s Employee Benefits Security Administration (EBSA) regional office in Kansas City, Missouri, which investigated the case.

The suit, filed in federal district court in Minneapolis, alleges that Allstate Home Mortgage was the plan administrator and a fiduciary of the plan. Prior owner David P. Schultz sold the company to Daniel P. Leaf pursuant to an installment agreement. However, Leaf died on November 16, 2005, before paying all of the installment payments. Schultz reopened Allstate Home Mortgage in 2006.

The suit seeks to remove Leaf, who was the only individual with the authority to distribute the plan’s assets, as plan fiduciary, and to appoint an independent fiduciary to terminate the plan and issue distributions to plan participants.

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. Employers and workers with questions or concerns regarding their private sector pension and health plans can contact EBSA’s Kansas City Regional Office at 816.285.1800 or EBSA toll-free at 1.866.444.EBSA (3272). Information is also available on the agency’s Web site at www.dol.gov/ebsa.

Chao v. Allstate Home Mortgage
Civil Action Number 07-cv-04462

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Archived News Release — Caution: Information may be out of date.