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Release Date: April 19, 2006
Release Number: 06-660-KAN
Contact Name: Norma J. Conrad
Phone Number: 816.426.5481
Kansas City, Missouri - The U.S. Department of
Labor filed a lawsuit in U.S. District Court for the Western District of
Missouri to obtain a court-appointed, independent fiduciary to manage
the abandoned retirement plan of now-defunct Video Post Productions Inc.
of Kansas City.
The department asked the court to appoint Lefoldt
& Co. P.A., of Ridgeland, Mississippi, to be the independent
fiduciary. The firm would be responsible for distributing $273,580 in
assets to plan participants and terminating the plan.
The suit alleges that Video Post Productions did not
formally terminate the plan or appoint a successor fiduciary to manage
it after the company ceased operations in July 2003. Participants and
beneficiaries were unable to obtain distributions of assets remaining in
the plan.
“The law states that plans must be managed and
operated by employers or plan fiduciaries. When plans are abandoned by
all designated fiduciaries, they become orphan plans,” said Steven
Eischen, director of the department’s regional office of the Employee
Benefits Security Administration (EBSA). “Our case ensures that these
workers and their families have someone with authority to appropriately
conclude plan business and distribute its assets to eligible
participants.”
Employers with similar problems, but not currently
the subject of an EBSA investigation, may be eligible to participate in
the department’s Voluntary Fiduciary Compliance Program (VFCP).
Participation in the VFCP requires employers to correct any violations,
but allows them to avoid EBSA enforcement actions and civil penalties as
well as applicable excise taxes. For more information about the VFCP,
see www.dol.gov/ebsa.
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 reach EBSA’s Kansas City
regional office at 816.426.5131 or may 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. Video Post Productions Inc., 401(k) Profit
Sharing Plan)
Civil Action No. 4:06-cv-309
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