U.S. Labor Department sues to appoint independent fiduciary for 401(k) plan abandoned by Buffalo, 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Archived News Release — Caution: Information may be out of date.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 in 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 Pohlman Foundry Co. Inc. of Buffalo, New York.

The Pohlman Foundry Co. Inc. 401(k) Plan for Collectively Bargained Employees was sponsored by the company until around October 2002 when the plan’s fiduciaries stopped performing their duties without appointing a successor fiduciary to perform those functions. James Pohlman, Jay S. Hodge, James Gagan, Mike Mazzarino and Brian Gerboth were the fiduciaries and company officials involved with the plan.

As result of the abandonment, plan participants, mostly former employees of the defunct company, have been unable to access their accounts. Under the Employee Retirement Income Security Act, employee benefit plans must be managed by plan fiduciaries. In the absence of a fiduciary, participants and beneficiaries cannot obtain plan information, make investments or collect retirement benefits.

The Labor Department’s suit asks the court to appoint an independent fiduciary to manage the plan, distribute its assets to participants and beneficiaries, and oversee its termination. As of March 31, 2007, the plan had six participants and $20,848.69 in assets, the latest data available. ADP Retirement is the custodian of the funds.

“This legal action should demonstrate that the Labor Department will not hesitate to protect the rights of even a small group of plan participants by initiating litigation when necessary,” said James Benages, regional director in Boston for the Labor Department’s Employee Benefits Security Administration (EBSA). “We hope the court will help ensure that these individuals receive the retirement benefits they are due.”

The suit resulted from an investigation conducted by EBSA’s regional office in Boston. Employers and workers in upstate and western New York can contact that office at 617.565.9600 or toll-free at 866.444.3272 for help with problems relating to private sector pension and health plans. In fiscal year 2007, EBSA achieved monetary results of $1.5 billion related to pension, 401(k), health and other benefits for millions of American workers and their families. Additional information can be found at www.dol.gov/ebsa.

Chao v. Pohlman Foundry Co. Inc. 401(k) Plan for Collectively Bargained Employees
Civil Action Number: 08-CV-279

U.S. Department of Labor news releases are accessible on the Department's Newsroom page. The information in this news release will be made available in alternate format upon request (large print, Braille, audio tape or disc) from the COAST office. Please specify which news release when placing your request at 202.693.7828 or TTY 202.693.7755. The U.S. Department of Labor is committed to providing America's employers and employees with easy access to understandable information on how to comply with its laws and regulations. For more information, please visit the Department's Compliance Assistance page.

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