U.S. Labor Department obtains court judgment against closed Seatoma Convalescent Center, giving workers access to nearly $18,000 in retirement funds

Seattle – The U.S. Department of Labor has obtained a default judgment against the Seatoma Convalescent Center of Des Moines, Washington, giving its workers access to nearly $18,000 in 401(k) trust assets.

In a lawsuit filed in the U.S. District Court for the Western District of Washington, the Labor Department alleged that the nursing home facility failed to fulfill its fiduciary duties to participants covered by an employee retirement plan. The suit also alleged that the company failed to take sufficient steps to provide for the prudent and complete termination of its 401(k) plan after the company ceased operations. The suit asked the court to appoint an independent fiduciary to administer the plan in order to complete the termination and distribution of plan assets to participants and beneficiaries.

The judgment announced today resolves the Labor Department’s suit. The court has appointed ERISA Diagnostics Inc. of Exton, Pennsylvania., as the independent fiduciary.

“Abandoning an employee benefit plan is akin to abandoning the workers who invested in it. We took this legal action so that plan participants can access their retirement funds,” said Billy Beaver, regional director for the department’s Employee Benefits Security Administration (EBSA) in San Francisco.

The Labor Department has issued rules that allow financial institutions holding assets of abandoned plans to take responsibility and distribute the assets to affected workers and their families. In cases where the involved financial institutions decline that role, an independent fiduciary can be appointed to finalize the plan’s business. The department estimates that 1,650 such plans are abandoned each year. Information about the rules is available under the Abandoned Plan Program section of EBSA’s Web site at www.dol.gov/ebsa.

Employers and workers can contact EBSA’s agency’s Seattle office at 206.553.4244 or toll-free at 866.444.3272 for help with problems relating to private sector pension and health plans. In fiscal year 2008, EBSA achieved monetary results of $1.2 billion related to the pension, 401(k), health and other benefits for millions of American workers and their families.

Secretary of Labor v. Seatoma Convalescent Center Inc.
Civil Action Number 2:09-CV-00227-JLR

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