U.S. Labor Department obtains court appointed independent fiduciary for 401(k) plan abandoned by Brooklyn, New York medical practice

Archived News Release — Caution: Information may be out of date.

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 the former Storch Sheinbrot & Singer Physicians PC of Brooklyn, New York.

Under the order, entered in the U.S. District Court for the Eastern District of New York, the court appointed Jacqueline Carmichael as the independent fiduciary of the abandoned plan. The independent fiduciary has authority to manage the plan, distribute its assets and terminate the plan.

The plan was sponsored by Storch Sheinbrot & Singer Physicians until the medical practice was sold in February 2006 and became Bay Imaging. At that time, the former trustee of the plan resigned and the new owner of the practice did not take responsibility for overseeing the plan. Bay Imaging ceased operations in August 2006.

This situation left the plan’s participants, mostly former employees of the medical practice, unable to access their accounts. Under the Employee Retirement Income Security Act, employee benefit plans must be managed by a fiduciary. In the absence of a plan fiduciary, participants and beneficiaries cannot obtain plan information or access accounts to make investments or collect retirement benefits.

As of December 2006, the plan had 50 participants and $961,724.50 in assets. T. Rowe Price, Merrill Lynch and UBS Financial Services are the custodians of the funds.

“When an employee benefit plan is abandoned, so are the workers who invested in it,” said Jonathan Kay, regional director in New York 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 call EBSA 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. Storch Sheinbrot & Singer Physicians PC 401(k) Plan & Trust
Civil Action Number: 1:07-CV-4880

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Archived News Release — Caution: Information may be out of date.