U.S. Labor Department investigation results in defunct Memphis, Tenn., heating and air conditioning maintenance company being removed as plan fiduciary

Memphis, Tenn. – The U.S. Department of Labor has obtained a default judgment requiring that Stephens Brothers Inc. be removed as fiduciary of the former Memphis company's 401(k) plan.

The order, issued by the U.S. District Court for the Western District of Tennessee, found that Stephens Brothers Inc. violated provisions of the Employee Retirement Income Security Act (ERISA).

The judgment appoints an independent fiduciary to terminate the plan and distribute assets of approximately $692,000 to the plan participants.

The order resulted from a lawsuit filed in December 2008 by the Labor Department's Employee Benefits Security Administration (EBSA) alleging that the company, as plan sponsor, had abandoned the plan after the company was administratively dissolved in 2003. Since that time, plan participants have not had access to their retirement accounts.

"The Labor Department's legal action will ensure that plan participants will have access to their retirement savings," said R.C. Marshall, regional director of EBSA's regional office in Atlanta, Ga.

Stephens Brothers Inc. was a heating and air conditioning maintenance company in Memphis until it closed in 2003.

Employers with similar problems who are not yet subjects of EBSA investigations may be eligible to participate in the department's Voluntary Fiduciary Correction Program. Participation requires employers to make workers whole but allows them to avoid EBSA enforcement actions and civil penalties as well as any applicable excise taxes.

This case resulted from an investigation conducted by EBSA's Atlanta office. 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. Employers and workers can reach EBSA's Atlanta Regional Office at 404-302-3900 or toll-free at 866-444-3272 for help with problems relating to private sector retirement and health plans. For more information, see http://www.dol.gov/ebsa.

Solis v. Stephens Brothers Inc.
Civil Action File Number 2:08-cv-2865

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.