US Labor Department obtains court-appointed independent fiduciary for 401(k) plan of defunct Westerly, RI, company

PROVIDENCE, R.I. – 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 BlueSky Brands Inc. of Westerly, R.I. The judgment and order resolve a lawsuit filed by the Labor Department against the company for violations of the Employee Retirement Income Security Act.

Under the judgment and order, the court appointed Northeast Retirement Services Inc. of Woburn, Mass., to serve as the independent fiduciary of the BlueSky Brands Inc. 401(k) Savings 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 Rhode Island.

“It’s doubly unfortunate when the closure of a company results in workers both losing 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, Mass. “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.”

BlueSky Brands Inc. sponsored the 401(k) plan to provide retirement benefits to the plan participants. Prior to ceasing operations in March 2008, 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 ERISA, 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 Aug. 31, 2010, the plan had 77 participants and assets totaling $1,055,136.89, the latest data available. Fidelity Investments is the custodian of all of the plan’s assets and will not release those assets without the authorization of a plan fiduciary.

This suit resulted from an investigation conducted by EBSA’s Boston Regional Office. The case was litigated by the Labor Department’s regional solicitor 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. BlueSky Brands Inc.
Civil Action Number: 1:10-CV-00522-S

# # #

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.