US Labor Department obtains court-appointed independent fiduciary for 401(k) plan abandoned by Rowley, Mass., employer

BOSTON – The U.S. Department of Labor has obtained a court order appointing an independent fiduciary to manage the abandoned 401(k) plan of defunct VIPswitch Inc. of Rowley, Mass.

Under the order, entered in the U.S. District Court for the District of Massachusetts, the court appointed Northeast Retirement Services Inc. of Woburn, Mass., to serve as the independent fiduciary of the VIPswitch Inc. 401(k) plan. The independent fiduciary has the authority to manage the plan, distribute its assets to eligible participants and beneficiaries, and terminate the plan. The order resolves a lawsuit filed by the Labor Department in May of this year.

The company, which ceased operations in January 2005, sponsored the 401(k) plan to provide retirement benefits to participants who were employees of VIPswitch. During the period beginning in 2001, Daniel Lefebvre was CFO of the company and was the plan administrator, while Luc Beaubien, the company’s former president, was the plan trustee and the only authorized signatory to the plan. Both individuals subsequently abandoned their fiduciary responsibilities to the plan and the Labor Department has been unable to contact them.

When the company ceased operations, no steps were taken to ensure the continued 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 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 Edward Maloney, acting regional director of the Labor Department’s Employee Benefits Security Administration in Boston. “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. VIPswitch Inc.
Civil Action Number: 1:10-CV-10826-JLT

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