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

New York – The U.S. Department of Labor has filed a lawsuit asking the U.S. District Court for the Western District of New York to appoint an independent fiduciary to oversee the abandoned 401(k) plan of defunct Project Solutions Inc. of Rochester, N.Y.

The Project Solutions 401(k) SIMPLE Plan was sponsored by Project Solutions Inc., which has ceased operations. The only trustee and fiduciary of the plan, company owner Earl Shepherd, abandoned his responsibilities to the plan sometime in 2006. The plan, established for the benefit of the company's employees, was funded in part by salary withholdings from employees' paychecks.

When the company ceased operations, no steps were taken to ensure the continuing prudent administration of the plan. As a result, former employees of the company have been unable to access their 401(k) accounts. Under the Employee Retirement Income Security Act, 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 suit asks the court to appoint an independent fiduciary who will effect the proper distribution of the plan's assets to the remaining participants of the plan, and who will then effect the plan's proper 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 in such an unfortunate situation," 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."

The case was investigated by EBSA's Boston Regional Office. Employers and workers can contact that office at 617-565-9600 or may call EBSA's toll-free number, 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. Project Solutions 401(k) SIMPLE Plan
Civil Action Number: 6:09-CV-06646-MAT

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