U.S. Labor Department sues to appoint independent fiduciary for 401(k) plan abandoned by Kennebunk, Maine, company

Archived News Release — Caution: Information may be out of date.

Portland, Maine – The U.S. Department of Labor has filed a lawsuit in the U.S. District Court for the District of Maine seeking appointment of an independent fiduciary to oversee the abandoned 401(k) plan of TRITECH Information Strategies Inc., formerly of Kennebunk, Maine.

The company sponsored the plan for the benefit of its employees beginning on January 1, 2000, and ceased operations in 2002. The suit alleges that in June 2004, John E. Schofield, president and owner of TRITECH, was incarcerated in India on fraud charges. He and his wife, Linda A. Schofield, were trustees of the plan. After ceasing TRITECH's operations, the Schofields failed to take any steps to prudently administer the plan, thereby abandoning it.

The Employee Retirement Income Security Act requires employee benefit plans to be managed by named fiduciaries. Without a fiduciary, plan participants and beneficiaries cannot obtain plan information or access accounts to make investments or collect retirement benefits.

Six of the plan's seven participants have received distributions of their plan accounts, but one has not. Blackrock Funds of Pittsburgh, Pennsylvania, is the custodian of the plan's assets. Following requests by the Labor Department, Blackrock has declined to exercise its option under the department's regulations to release the remaining assets to the sole remaining plan participant. As a result, this last individual cannot obtain his appropriate plan distribution without the intervention of the federal court.

The Labor Department's suit asks the court to appoint an independent fiduciary to administer the plan, distribute the remaining assets to the remaining plan participant and oversee the plan's termination. The plan currently has approximately $21,000 in assets being held by Blackrock Funds.

"This suit demonstrates that the Labor Department will act to protect the rights of even a single plan participant 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 this individual receives the retirement benefits he is due."

The suit resulted from an investigation conducted by EBSA's regional office in Boston. Employers and workers 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 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. Additional information can be found at www.dol.gov/ebsa.

Chao v TRITECH Information Strategies Inc.
Civil Action Number: 2:08-CV-00321-DBH

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