US Labor Department obtains court-appointed independent fiduciary for 401(k) plan of defunct Canton, Mass., company

BOSTON – The U.S. Department of Labor has obtained a court judgment and order appointing an independent fiduciary to manage the 401(k) plan of defunct CEA Systems Inc. of Canton, Mass. The company operated as CEA Incorporated and CEA Inc.

Under the judgment and order, the court appointed Northeast Retirement Services Inc. of Woburn, Mass., to serve as the independent fiduciary of the CEA Inc. 401(k) 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 judgment was entered in the U.S. District Court for the District of Massachusetts.

The 401(k) plan was sponsored by the company to provide retirement benefits to the plan participants, who were employees of CEA Systems Inc., which ceased operations in 1998. During the period covered by the Labor Department's lawsuit, John A. Solomon was the president of CEA and served as a fiduciary to the plan. Solomon, who died in October 2001, was the only authorized signatory of the plan.

Prior to ceasing operations in August 1998, the company failed to take steps to ensure the ongoing prudent administration of the plan, according to the Labor Department's suit. 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. As of Dec. 22, 2009, the plan had 17 participants and assets totaling $31,804, the latest data available.

"It's most unfortunate when the closure of a company ultimately causes workers to both lose their jobs and access to the retirement benefits they have earned," 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."

This suit resulted from an investigation conducted by EBSA's Boston Regional Office. The case was litigated by the Labor Department's Regional Solicitor's Office in Boston. Employers and workers can contact EBSA's Boston office 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. CEA Systems Inc.
Civil Action Number: 1:10-CV-11659-GAO

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