U.S. Labor Department sues to appoint independent fiduciary for 401(k) plan abandoned by former Iowa employer

Kansas City, Missouri — The U.S. Department of Labor has filed a lawsuit in the U.S. District Court for the Southern District of Iowa in Davenport seeking the appointment of an independent fiduciary to oversee the abandoned 401(k) plan of defunct MagnaTech Inc., formerly of Brooklyn, Iowa.

Lennart Alfredeen, the sole trustee and fiduciary of the plan, stopped managing the MagnaTech 401(k) Plan, and took no steps to terminate the plan and distribute its assets to former employees covered by the plan. The plan remained in effect until the company ceased operations September 1996.

The Labor Department’s Employee Benefits Security Administration (EBSA) estimates that the plan has approximately $33,000 in assets to be distributed to 14 former employees. Under the Employee Retirement Income Security Act, 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 suit seeks to appoint an independent fiduciary with authority to manage the plan, distribute its assets to eligible participants and beneficiaries, and terminate the plan.

“Workers should know that they can turn to the Labor Department for assistance when they find themselves in this type of situation,” said Steven Eischen, the department’s EBSA regional director in Kansas City. “We took this legal action to ensure that the plan is properly managed so that its participants can finally gain access to their retirement assets.”

This case resulted from an investigation conducted by EBSA’s office in Kansas City. Employers and workers can reach EBSA’s Kansas City office at 816.285.1800 or toll-free 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.

Solis v. MagnaTech Inc.
Civil Action Number: 3:09-cv-43

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