U.S. Department of Labor obtains consent judgment against Herndon, Virginia, company to protect participants of abandoned retirement plan

Herndon, Virginia – The U.S. Department of Labor has obtained a consent judgment in the U.S. District Court for the Eastern District of Virginia removing Answers Inc. and 401(k) trustee Cynthia Chambliss as fiduciaries of the company’s 401(k) profit-sharing plan and appointing JM Pension Advisory Inc. as the independent plan fiduciary. Answers Inc. is a defunct company formerly located in Herndon, Va., that operated under the names Transit Services LLC and Answer Transit Services Corp.

Answers Inc. established the plan in 2005 and managed it until 2006 when the company ceased operations. Since then, 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. The plan had $35,000 in assets and 18 participants as of December 31, 2007, the latest data available.

“The Labor Department is committed to protecting workers’ pension plans and will vigorously pursue legal action when they are compromised,” said 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 Washington District Office. Employers and workers can reach that office at 202.693.8700 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. Answers Inc.
Civil Action Number 1:09-cv-92

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