US Labor Department sues to appoint independent fiduciary for 401(k) plan abandoned by Sherrill, N.Y., employer

NEW YORK – The U.S. Department of Labor has filed a lawsuit in the U.S. District Court for the Northern District of New York seeking the appointment of an independent fiduciary to oversee the abandoned 401(k) plan of the defunct Swigonski Management Group, formerly located in Sherrill, N.Y.

The Swigonski Management Group 401(k) Plan, which provided retirement benefits for employees of three franchise restaurants, was sponsored by the company from January 2000 until it ceased operations in February 2006. The restaurants included Benny’s 1, Two Benny’s and Benny’s 3.

The Labor Department’s suit alleges that Robert Swigonski stopped performing his fiduciary duties on behalf of the plan without ensuring the appointment of a new fiduciary to oversee the plan. He was the owner of the company and the trustee of the 401(k) plan.

As a result, plan participants 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 suit asks the court to appoint an independent fiduciary to administer the plan, distribute its assets to eligible participants and beneficiaries, and oversee proper termination of the plan. Goldman Sachs, the plan’s custodian, was holding $24,182 in plan assets as of January 2009.

“Even in a small case like this, workers should know that they can turn to the Labor Department for assistance when they find themselves locked out of access to their retirement plan,” said Edward Maloney, acting regional director of the Labor Department’s Employee Benefits Security Administration office 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 EBSA at 617-565-9600 or toll-free at 866-444-3272 for help with any problems relating to private sector pension and health plans. Additional information can be found at http://www.dol.gov/ebsa.

Solis v. Swigonski Management Group 401(k) Plan
Civil Action Number: 6:10-CV-01326-DNH-GHL

# # #

U.S. Department of Labor releases are accessible on the Internet at http://www.dol.gov. 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 http://www.dol.gov/compliance.