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Release Date: 06/08/2001 Release
Number: III-01-06-08-051-VA Contact Name: Gloria Della Phone Number: 202.219.8921 |
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Springfield, Virginia - The U.S. Department
of Labor sued the 401(k) administrator and trustee of Springfield,
Virginia-based Infotex, Ltd. on June 8, 2001, for failure to appoint successor
fiduciaries to manage the plan and distribute its assets to plan
participants. |
Plans become orphan plans when they are
abandoned by all plan fiduciaries designated to manage and operate the plans
and their assets. As a result, participants and beneficiaries are unable to
receive pension distributions and to make inquiries about their
benefits. |
Infotex provided computer security to its clients
before ceasing operations in March 1998. The company created the plan in 1997
to provide retirement benefits to eligible participants employed by Infotex,
Sistex, DSK Systems and OCS. According to plan records, there were two
participants covered by the plan and assets of $102,432.63. |
The department alleges that Infotex and Russell
Varnado violated their duties under the Employee Retirement Income Security Act
(ERISA) as the plan administrator and trustee of the plan, respectively.
According to the lawsuit, Infotex and Varnado failed to manage the plan or to
appoint successor plan officials after the company ceased operations. The plan
allegedly ceased operations when the company went out of business. As a result,
participants were unable to get distributions from their pension
accounts. |
The defendants also allegedly failed to file
annual reports as required by ERISA for plan years 1997 to 1999. |
The lawsuit seeks a court order to remove the
defendants from their positions with the plan, appoint an independent fiduciary
to administer the plan, distribute the plans assets to participants and
beneficiaries, and. terminate the plan. In addition, it would require that
Metropolitan Life Insurance Co. -- the custodian of the plans assets --
turn over all assets to the independent fiduciary appointed by the
court. |
This action reaffirms our commitment to
protect the hard-earned benefits promised by employers, said Mabel
Capolongo, Director of PWBAs Philadelphia Regional Office.
Employers and workers can reach us at 215.861.5300 for help with any
problems relating to private-sector pension and health plans. |
(Chao v. Varnado Civil Action No.
01-899-A) |
U.S. Department of
Labor news releases are accessible on the Internet. The information in this
news release will be made available in alternate format upon request (large
print, Braille, audio tape or disc) from the Central Office for Assistive
Services and Technology. Please specify which news release when placing your
request. Call 202.693.7773 or TTY 202.693.7775. |