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Release Date: April 6, 2006
Release Number: 06-431-NEW (036)
Contact Name: Leni Uddyback-Fortson
Phone Number: 215.861.5102
Clifton, New Jersey - The U.S. Department of
Labor has filed a lawsuit requesting that an independent fiduciary be
appointed to distribute the assets of the 401 (k) plan of Data-Tech
Institute, a defunct Clifton, New Jersey company. The plan has been
without oversight since the company ceased operations in 1998.
“Companies that sponsor retirement plans have a
legal responsibility to the employees who earnestly contribute to them,”
says Jonathan Kay, director of the New York regional office of the
department’s Employee Benefits Security Administration (EBSA), which
investigated the case. “When a company goes out of business, that
responsibility is not relinquished.”
The plan was abandoned when the company stopped doing
business, and plan fiduciaries John Quagliana and Harry Smith stopped
performing their duties without appointing another fiduciary. According
to the suit, plan participants and beneficiaries have been unable to
access their individual account balances.
Plans become “orphan plans” when they are
abandoned by all fiduciaries designated to manage and operate them,
leaving participants without a way to transact business and communicate
with the plan.
As of September 2005, the plan had 39 participants
and approximately $45,700 in assets.
Employers and workers can reach EBSA’s New York
regional office at 212.607.8600 or can contact EBSA’s toll-free number
1.866.444.EBSA (3272), for help with problems relating to private sector
retirement and health plans.
(Chao v. Data-Tech)
Civil Action No. 2:06 cv 01566 JCL-MF
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