U.S. Labor Department obtains appointment of independent fiduciary for abandoned 401(k) plan of Buffalo, New York company

Archived News Release — Caution: Information may be out of date.

Buffalo, New York – The U.S. Department of Labor has obtained a federal court order appointing an independent fiduciary to manage the abandoned 401(k) plan of defunct Pohlman Foundry Co. Inc. of Buffalo.

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 and failed to appoint a successor fiduciary to perform those functions. 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.

In April 2008, the Labor Department sued in the U.S. District Court for the Western District of New York to obtain appointment of an independent fiduciary to administer the plan. After filing suit, the plan’s last known fiduciary, James Pohlman, signed a consent order proposing the appointment of a new fiduciary for the plan. On June 8, the court appointed Jacqueline Carmichael of JM Pension Advisory Inc. as the plan’s independent fiduciary and sole trustee. Carmichael has authority to administer the plan, distribute its assets to participants and beneficiaries, and terminate the plan.

Plans become “orphan plans” when they are abandoned by all fiduciaries legally designated to manage and operate them. 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 of the department’s Employee Benefits Security Administration (EBSA) in Boston.

The suit resulted from an investigation conducted by EBSA’s Boston office. 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

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Archived News Release — Caution: Information may be out of date.