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Release Date: September 14, 2006
Release Number: 06-1284-PHI (EBSA 06-142)
Contact Name: Leni Uddyback-Fortson
Phone Number: 215.861.5102
West Middlesex, Pennsylvania - The U.S Labor
Department has sued Coast to Coast Home Equity Corp. to obtain
appointment of an independent fiduciary to distribute the assets of the
company’s 401(k) plan to plan participants. The defunct West
Middlesex, Pennsylvania company is currently in bankruptcy and ceased
operations in May 2004.
An investigation conducted by the department’s
Employee Benefits Security Administration found that since ceasing
operations, the company has not taken fiduciary responsibility for the
operation and administration of the plan and its assets, and has not
appointed anyone to assume that responsibility. As a result, plan
participants and beneficiaries have not been able to access their
account balances.
Plans become “orphan plans” when they are
abandoned by all fiduciaries designated to manage and operate them and
their assets.
“The law states that plans must be managed and
operated by employers or plan fiduciaries,” said Mabel Capolongo,
director of the Philadelphia regional office of the department’s
Employee Benefits Security Administration (EBSA) in Philadelphia. “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
The suit, filed in the U.S. District Court for the
Western District of Pennsylvania, seeks to remove Coast to Coast from
its position as fiduciary and have an independent fiduciary appointed to
terminate the plan and distribute its assets to plan participants and
beneficiaries. As of January 2006, the plan had 19 participants and
$19,980 in assets.
The Labor Department’s legal action resulted from
an investigation conducted by EBSA’s Philadelphia 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 Philadelphia
office at 215.861.5300 or through its toll-free number, 1.866.444.EBSA
(3272), for more information on the requirements of ERISA. Additional
information can be found at www.dol.gov/ebsa.
(Chao v. Coast to Coast)
Civil Action No. 06-cv-01212
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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.
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