U.S. Labor Department sues to appoint independent fiduciary for 401(k) plan abandoned by New York City company

Archived News Release — Caution: Information may be out of date.

New York – The U.S. Department of Labor has filed a lawsuit asking the U.S. District Court for the Southern District of New York to appoint an independent fiduciary to oversee the abandoned 401(k) plan of defunct Chelsea Voice & Data Inc. of New York City.

The Chelsea Voice & Data Inc. 401(k) Plan, also known as the Chelsea Voice & Data d/b/a South Shore Communications 401(k) Plan, was sponsored by the company until about July 2004. At that point, Paul M. Henry, the owner of the company and the sole trustee and fiduciary to the plan, ceased operating both the company and the plan.

As a result, former employees were unable to access their 401(k) accounts. Under the Employee Retirement Income Security Act, employee benefit plans must be managed by named fiduciaries. In the absence of a plan 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 administer the plan, distribute its assets to participants and beneficiaries, and oversee the plan’s termination. ING is custodian of the plan’s funds, now being held by Citistreet.

“Workers should know that they can turn to the Labor Department for assistance when they find themselves in this type of situation,” said Jonathan Kay, regional director in New York City for the Labor Department’s Employee Benefits Security Administration (EBSA). “We took this legal action to ensure that the plan is properly managed and its participants gain access to their retirement assets.”

The suit resulted from an investigation by EBSA’s regional office in New York City. Employers and workers can contact the office at 212.607.8600 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. Chelsea Voice & Data Inc. 401(k) Plan
Civil Action Number: 08-CV-5407 (DLC)

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Archived News Release — Caution: Information may be out of date.