US Labor Department obtains court-appointed independent fiduciary for 401(k) plan abandoned by defunct Sherrill, NY, 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 Swigonski Management Group, formerly located in Sherrill.

Under the order, entered in the U.S. District Court for the Northern District of New York, the court appointed M. Larry Lefoldt of Lefoldt & Co. PA to serve as the independent fiduciary of the Swigonski Management Group 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 November 2010.

The department's suit alleged that Robert Swigonski stopped performing his fiduciary duties on behalf of the plan without ensuring the appointment of a new fiduciary. He was the owner of the company and the trustee of the 401(k) plan, which had assets totaling $24,182 as of January 2009, the latest data available. 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.

As a result of the plan's abandonment, 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.

"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 the agency 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

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