US Labor Department obtains court order garnishing wages of former trustee of 401(k) plan abandoned by Rochester, NY, employer

New York – The U.S. Department of Labor has obtained a federal court order of wage garnishment against Bonnie Dolan (also known as Bonnie Ariola), previously the sole owner of the now defunct Bonnie Optical Inc. of Rochester, N.Y. Dolan was also the sole trustee and fiduciary of the company's 401(k) plan set up for the benefit of her then employees.

The court granted the order of garnishment, which has been served on Dolan and her current employer, a company in the Rochester area. Under the order, her wages are garnished at $135.87 bi-weekly until Dolan's debt to the plan is fully paid. The payments will be made to Jacqueline Carmichael of JM Pension Advisory, an independent fiduciary previously appointed by the court.

At the time her company ceased operating in 1999, Dolan stopped managing the plan and took no steps to terminate it and distribute its assets to former employees covered by the plan. As a result, the employees 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.

In addition, Dolan allowed the plan's assets, which were not appreciating in value, to be steadily depleted by account charges. The Labor Department sued in the U.S. District Court for the Western District of New York, alleging that Dolan failed to act to stop the loss of plan assets by distributing the assets to plan participants or preserving the assets in a suitable investment vehicle.

The Labor Department subsequently petitioned the court for a default judgment to immediately appoint an independent fiduciary to manage the 401(k) plan, which was granted in July 2009. The court order also held Bonnie Dolan liable for $1,202.22, ordered her to forfeit her own account balance from the plan, removed her as the plan's trustee, and barred her from ever again serving as a fiduciary or service provider for any ERISA-covered plan.

"Unfortunately, even after the independent fiduciary offset Dolan's full plan account balance, she still owed the plan $815.22," said Jean Ackerman, director of the Boston Regional Office for the Labor Department's Employee Benefits Security Administration (EBSA). "Our legal action allows us to recover plan assets by garnishing wages paid to Dolan at her present place of employment."

This legal action resulted from an investigation conducted by EBSA's Boston office. Employers and workers can contact that 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 2009, EBSA achieved monetary results of $1.3 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. Bonnie Dolan; Civil Action Number: 09-CV-6087

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