U.S. Labor Department obtains appointment of independent fiduciary for profit-sharing plans abandoned by defunct Binghamton, New York, companies

NEW YORK – The U.S. Department of Labor has obtained two federal court orders appointing the same independent fiduciary to manage the abandoned profit-sharing plans of defunct H&M Tool & Machine Co. Inc. and Valmar Industrial Corp., both formerly located in the Binghamton, New York, area.

Each company sponsored a profit-sharing plan under control of the same owner and same fiduciary. The plans’ fiduciary ceased administering the plans when the companies went out of business in 2004. As a result, the former employees who participated in the profit-sharing plans were unable to access their plan accounts.

Under the Employee Retirement Income Security Act, employee benefit 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.

In April, the Labor Department filed separate lawsuits in the U.S. District Court for the Northern District of New York. The suits alleged that the plans had not filed legally required annual reports since 1994 nor provided their participants with required summary plan descriptions. Since 2004, participants and beneficiaries have not been able to obtain distributions from either plan.

The department has obtained consent orders from the court appointing Jacqueline M. Carmichael as the independent fiduciary for both plans, with authority to administer the plans, distribute their assets to eligible participants and beneficiaries, and terminate the plans.

“This legal action should demonstrate that the Labor Department will take whatever steps are necessary to protect the retirement funds of abandoned plan participants by initiating litigation when necessary,” said Jean Ackerman, director of the Boston office for the Labor Department’s Employee Benefits Security Administration (EBSA), which conducted the investigations that led to these suits.

Employers and workers can contact EBSA’s Boston office at 617.565.9600 or toll-free at 866.444.3272 for help with any problems relating to private sector pension 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. Additional information can be found at www.dol.gov/ebsa.

Solis v. H&M Tool & Machine Co. Inc. Profit-Sharing Plan
Civil Action Number: 3:09-CV-00499-DNH

Solis v. Valmar Industrial Corp. Profit-Sharing Plan
Civil Action Number: 3:09-CV-00498-DNH-DEP

U.S. Department of Labor news releases are accessible on the Department's Newsroom page. The information in this news release will be made available in alternate format (large print, Braille, audio tape or disc) from the COAST office upon request. Please specify which news release when placing your request at 202.693.7828 or TTY 202.693.7755. The Labor Department is committed to providing America's employers and employees with easy access to understandable information on how to comply with its laws and regulations. For more information, please visit the Department's Compliance Assistance page.