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News Release

U.S. Labor Department obtains court appointed independent fiduciary for 401(k) plan abandoned by Rochester, New York, employer

New York – The U.S. Department of Labor has obtained a court order appointing an independent fiduciary to manage the abandoned 401(k) plan of defunct Project Solutions Inc. of Rochester, New York.

Under the order, entered in the U.S. District Court for the Western District of New York, the court appointed Jacqueline M. Carmichael of JM Pension Advisory as the independent fiduciary of the abandoned plan. The independent fiduciary has the authority to manage the plan, distribute its assets to the plan’s participants and beneficiaries, and terminate the plan. The order resolves a lawsuit filed by the Labor Department in December 2009.

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 was established for the benefit of the company’s employees and 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.

“When an employee benefit plan is abandoned, so are the workers who invested in it,” said Jean Ackerman, regional director in Boston, Mass., for the Labor Department’s Employee Benefits Security Administration. “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 about the agency can be found at http://www.dol.gov/ebsa.

Solis v. Project Solutions 401(k) SIMPLE Plan
Civil Action Number: 6:09-CV-06646-MAT

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Agency
Employee Benefits Security Administration
Date
March 18, 2010
Release Number
10-302-NEW/BOS 2010-117