U.S. Labor Department obtains default judgment against West Chester, Pennsylvania, company to protect participants of abandoned retirement plan

Archived News Release — Caution: Information may be out of date.

Pittsburgh – The U.S. Department of Labor has obtained a default judgment removing West Chester, Pennsylvania-based Five Star Industrial Services Inc. as fiduciary of the company’s 401(k) profit-sharing plan and appointing Metro Benefits Inc. to be the plan’s independent fiduciary.

The judgment, entered in the U.S. District Court for the Eastern District of Pennsylvania, resolves a Labor Department lawsuit. Five Star Industrial Services Inc. established the plan in 1985 and managed it until 1995 when the company ceased operations. Since that time, the company has not taken fiduciary responsibility for the operation of the plan and its assets, nor has it appointed anyone to assume that responsibility. As a result, plan participants and beneficiaries have not been able to access their individual account balances.

“This action sends a clear message that the Labor Department will vigorously pursue legal action when necessary to protect workers’ pension plans,” says Mabel Capolongo, regional director of the department’s Employee Benefits Security Administration (EBSA) in Philadelphia.

Employers with similar problems who are not yet the subjects of investigations by EBSA may be eligible to participate in the department’s Voluntary Fiduciary Correction Program (VFCP). Participation in the VFCP requires employers to make workers whole but allows them to avoid EBSA enforcement actions and civil penalties as well as any applicable excise taxes. For more information about the VFCP, see www.dol.gov/ebsa.

The court action resulted from an investigation conducted by EBSA’s Philadelphia office. Employers and workers can reach that office at 215.861.5300 or toll-free number at 866.444.3272 for help with problems relating to private sector retirement and health plans.

In fiscal year 2008, EBSA achieved monetary results of $1.2 billion related to pension, 401(k), health and other benefits for millions of American workers and their families.

Chao v. Five Star Industrial Services Inc
Civil Action Number: 08-cv-4073

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Archived News Release — Caution: Information may be out of date.