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Release Date: June 13, 2008
Release Number: 08-808-NEW/BOS 2008-173
Contact Name: John M. Chavez
Phone Number: 617.565.2075
Buffalo, New York – The U.S. Department of
Labor has obtained a federal court order appointing an independent
fiduciary to manage the abandoned 401(k) plan of defunct Pohlman Foundry
Co. Inc. of Buffalo.
The Pohlman Foundry Co. Inc. 401(k) Plan for
Collectively Bargained Employees was sponsored by the company until
around October 2002 when the plan’s fiduciaries stopped performing
their duties and failed to appoint a successor fiduciary to perform
those functions. Under the Employee Retirement Income Security Act,
employee benefit plans must be managed by plan fiduciaries. In the
absence of a fiduciary, participants and beneficiaries cannot obtain
plan information, make investments or collect retirement benefits.
In April 2008, the Labor Department sued in the U.S.
District Court for the Western District of New York to obtain
appointment of an independent fiduciary to administer the plan. After
filing suit, the plan’s last known fiduciary, James Pohlman, signed a
consent order proposing the appointment of a new fiduciary for the plan.
On June 8, the court appointed Jacqueline Carmichael of JM Pension
Advisory Inc. as the plan’s independent fiduciary and sole trustee.
Carmichael has authority to administer the plan, distribute its assets
to participants and beneficiaries, and terminate the plan.
Plans become “orphan plans” when they are
abandoned by all fiduciaries legally designated to manage and operate
them. As of March 31, 2007, the plan had six participants and $20,848.69
in assets, the latest data available. ADP Retirement is the custodian of
the funds.
“This legal action should demonstrate that the
Labor Department will not hesitate to protect the rights of even a small
group of plan participants by initiating litigation when necessary,”
said James Benages, regional director of the department’s Employee
Benefits Security Administration (EBSA) in Boston.
The suit resulted from an investigation conducted by
EBSA’s Boston office. Employers and workers in upstate and western New
York can contact that office at 617.565.9600 or toll-free at
866.444.3272 for help with problems relating to private sector pension
and health plans. In fiscal year 2007, EBSA achieved monetary results of
$1.5 billion related to pension, 401(k), health and other benefits for
millions of American workers and their families. Additional information
can be found at www.dol.gov/ebsa.
Chao v. Pohlman Foundry Co. Inc. 401(k) Plan for
Collectively Bargained Employees
Civil Action Number: 08-CV-279
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