U.S. Labor Department obtains appointment of independent fiduciary for 401(k) plan abandoned by Boston company

Boston – The U.S. Department of Labor has obtained a federal court order appointing an independent fiduciary to manage the abandoned 401(k) plan of defunct Boston-based Clearway Technologies LLC.

The court order, entered in the U.S. District Court for the District of Massachusetts, appoints Northeast Retirement Services of Woburn, Massachusetts, to be the independent fiduciary of the Clearway Technologies 401(k) Plan. In cases such as this, the independent fiduciary has authority to administer the plan, distribute the assets to eligible participants and beneficiaries, and terminate the plan.

The Labor Department filed suit under the provisions of the Employee Retirement Income Security Act (ERISA), the federal law that protects private sector employee pension and benefit plans. The suit alleged that defendant William J. McCart, as controller of the company, served functionally as plan administrator and was therefore a fiduciary with respect to the plan. The suit further alleged that McCart failed to properly discharge his fiduciary duties with respect to the plan, thereby leaving the plan’s participants unable to access their 401(k) accounts.

The latest available data reflect that the plan had seven participants and approximately $24,606 in assets. State Street Bank is the non-discretionary trustee of the plan in possession of the plan’s assets. State Street would not release the proceeds of the assets of the plan without receiving authorization from a fiduciary to the plan. The consent judgment permanently prohibits defendant William J. McCart from acting in a fiduciary capacity with respect to any ERISA-covered employee benefit plan.

“It is unfortunate when a fiduciary of an employee benefit plan abandons it and leaves plan participants unable to access their own funds,” said Jean Ackerman, regional director in Boston for the Labor Department’s Employee Benefits Security Administration (EBSA). “We took this legal action to protect the 401(k) plan’s participants by ensuring that they receive their retirement funds.”

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. William J. McCart
Civil Action Number: 1:09-CV-11372

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.