U.S. Department of Labor sues defunct Telford, Pennsylvania company to protect participants of 401(k) plan

Archived News Release — Caution: Information may be out of date.

Telford, Pennsylvania – The U.S. Department of Labor has sued Keystone Contractors, Inc. and the fiduciary of its profit sharing 401(k) plan, Donald Stauffer Jr., for violating their duty to the plan under the Employee Retirement Income Security Act (ERISA).

“Under the law, companies cannot abandon 401(k) plans when they cease operations,” says Mabel Capolongo, regional director of the Labor Department’s Employee Benefits Security Administration (EBSA) in Philadelphia, which conducted the investigation. “We took action because Keystone Contractors did not protect the interests of its plan participants.”

Filed in the U.S. District Court for the Eastern District of Pennsylvania, the suit seeks to appoint an independent fiduciary to terminate the plan and distribute its assets to participants and beneficiaries. As of July 10, 2007, the plan had 18 participants and approximately $27,051 in assets.

Keystone Contractors, a general contractor, established its profit sharing 401(k) plan in August 1995. The company ceased operations in 2003. Since then, neither the company nor Stauffer, as plan fiduciary, took responsibility for the operation or administration of the plan and its assets. As a result, plan participants and beneficiaries were denied access to their individual account balances.

Employers and workers can reach EBSA’s Philadelphia Regional Office at 215.861.5300 or toll-free at 1.866.444.EBSA (3272) for help with problems relating to private sector retirement and health plans. Information is also available on the agency’s web site at www.dol.gov/ebsa. 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. Keystone Contractors, Inc.)
Civil Action Number: 07-cv-4835

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Archived News Release — Caution: Information may be out of date.