Printer Friendly Version
Release Date: August 2, 2006
Release Number: 06-1316-SAN (SF-98)
Contact Name: Roger Gayman
Phone Number: 415.975.4742
San Francisco, California - An independent
trustee will begin distributing the remaining funds from a now-defunct
Oakland company’s “orphaned” 401(k) employee benefit plan under a
default judgment against the AM-PM Service Company.
AM-PM ceased operating in February 2003 without
appointing an individual to serve as a trustee or administrator of the
plan. The business, which repaired machinery used to load and unload
cargo vessels, filed for bankruptcy July 2002. The company abandoned the
401(k) plan after it went out of business.
Plans become “orphan plans” when they are
abandoned by fiduciaries designated to manage and operate them and their
assets. The judgment obtained by the U.S. Department of Labor appoints
an independent trustee to administer the plan, distribute approximately
$40,000 in assets to 10 remaining plan participants, and oversee the
plan’s termination.
“Abandoning the plan results in abandoning the
workers who invested in it,” said Francis C. Clisham, regional
director for the Labor Department’s Employee Benefits Security
Administration (EBSA) in San Francisco. “We took this legal action so
the plan participants can access their retirement funds.”
New Labor Department rules took effect on May 22 that
facilitate a voluntary, safe and efficient process for winding up the
affairs of abandoned plans. The new rules allow financial institutions
to take responsibility and distribute the assets of 401(k) plans to
affected workers and their families. The department estimates that 1,650
such plans are abandoned each year. Information about the new rules is
available under the Abandoned Plan Program section of EBSA’s Web site
at www.dol.gov/ebsa.
The legal action resulted from an investigation
conducted by EBSA’s San Francisco regional office. In fiscal year
2005, EBSA achieved monetary results of $1.7 billion related to pension,
401(k), health and other benefits for millions of American workers and
their families
Employers and workers can contact the agency’s San
Francisco office at 415.975.4600 or EBSA’s toll-free number,
1.866.444.EBSA (3272), for help with problems relating to private-sector
pension and health plans.
(Chao v. AM-PM Service Co., Inc. 401(k) Plan)
Civil Action No. C06-1220-MMC
U.S. Department of Labor news releases are accessible on the
Department's Newsroom
page. The information in this news release will be made available
in alternate format upon request (large print, Braille, audio tape or
disc) from the COAST office. Please specify which news release when
placing your request at 202.693.7765 or TTY 202.693.7755. The U.S.
Department of Labor 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 the
Department's Compliance
Assistance page.
|