U.S. Labor Department sues to appoint independent fiduciary for 401(k) plan abandoned by Melville, New York, employer

New York - The U.S. Department of Labor has filed a lawsuit asking the U.S. District Court for the Eastern District of New York to appoint an independent fiduciary to oversee the abandoned 401(k) plan of defunct Community Home Mortgage Corp., formerly located in Melville, New York.

The company sponsored the 401(k) plan until it ceased operations around September 2002. Ira Silverman, the company’s President/CEO and the plan’s only fiduciary, was responsibility for administering the plan, including making any distributions to employee participants. When the company went out of business, he stopped managing the plan and took no steps to terminate the plan and distribute its assets to former employees covered by the plan.

As a result, the employee participants of the plan were unable to access their 401(k) accounts. Under the Employee Retirement Income Security Act, plans must be managed by named fiduciaries. Without a plan fiduciary, participants and beneficiaries cannot obtain plan information, make investments or collect retirement benefits.

The Labor Department’s lawsuit asks the court to appoint an independent fiduciary to administer the plan, effectuate the distribution of the plan’s assets to the participants and beneficiaries, and oversee the plan’s termination.

“Even in a small case like this, workers should know that they can turn to the Labor Department for assistance when they find themselves locked out of access to their retirement plan,” said Jonathan Kay, regional director in New York for the Labor Department’s Employee Benefits Security Administration (EBSA).

This legal action resulted from an investigation conducted by EBSA’s New York Regional Office. Employers and workers can contact that office at 212.607.8600 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. Community Home Mortgage Corp. 401(k) Plan
Civil Action Number: 2:09-CV-03738-JS