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

New York - The U.S. Department of Labor has filed a lawsuit in U.S. District Court for the Western District of New York seeking the appointment of an independent fiduciary to oversee the abandoned 401(k) plan of defunct Digitel Solutions for Business Inc. or Empire Telecom Systems Corp., formerly located in Buffalo, New York .

The Digitel Solutions for Business Inc. 401(k) Plan (also known as Empire Telecom Systems Retirement Plan) was sponsored by the company until it ceased all operations around June 2004. At various times between 2000 and 2004, Laurence Davis (also known as Lawrence Davis), Christopher Sutton, Ronald Kelly and Michael Groh were officials of Digitel and served as fiduciaries to the plan. After the company went out of business, these individuals stopped managing the plan and failed to take 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 (ERISA), 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 Labor Department’s lawsuit asks the court to appoint an independent fiduciary to administer the plan, distribute its assets to eligible 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 Jean Ackerman, regional director in Boston for the Labor Department’s Employee Benefits Security Administration (EBSA). “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 suit resulted from an investigation conducted by EBSA’s Boston Regional Office. Employers and workers can contact the 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. Digitel Solutions for Business Inc. 401(k) Plan, a/k/a Empire Telecom Systems Retirement Plan
Civil Action Number: 1:09-CV-768

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