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Release Date: September 18, 2008
Release Number: 08-1241-NEW/BOS 2008-260
Contact Name: John M. Chavez
Phone Number: 617.565.2075
New York – The U.S. Department of Labor has
obtained a court order appointing an independent fiduciary to manage the
abandoned 401(k) plan of the defunct Freedom Security Systems Inc. of
New Hyde Park, New York.
The order, entered in the U.S. District Court for the
Eastern District of New York, appoints Jacqueline M. Carmichael as the
independent fiduciary of the abandoned plan. The independent fiduciary
has authority to manage the plan, distribute its assets and terminate
the plan.
The Freedom Security Systems Inc. 401(k) Plan was
sponsored by the company until it ceased operations around August 2006.
At that point, Ilene Maggio, the last known fiduciary of the plan,
stopped performing her duties without ensuring the appointment of a new
fiduciary to oversee distribution of the plan’s assets.
As a result, former employees were unable to access
their 401(k) accounts. Under the Employee Retirement Income Security Act
(ERISA), employee benefit plans must be managed by named fiduciaries. In
the absence of a plan fiduciary, participants and beneficiaries cannot
obtain plan information, make investments or collect retirement
benefits. American Funds is custodian of the plan’s funds, which were
valued at approximately $369,440.75 as of December 11, 2006, the latest
data available.
“Workers who invest in a 401(k) plan have a right
to see that their plan is administered properly, continually and for
their benefit only,” said Jonathan Kay, regional director in New York
for the Labor Department’s Employee Benefits Security Administration (EBSA).
“This legal action paves the way for the plan’s participants to
receive the benefits due them.”
The suit resulted from an investigation by EBSA’s
regional office in New York City. Employers and workers can contact the
office at 212.607.8600 or toll-free at 866.444.3272 for help with
problems relating to private sector pension and health plans.
In fiscal year 2007, EBSA achieved monetary results
of $1.5 billion related to pension, 401(k), health and other benefits
for millions of American workers and their families. Additional
information can be found at www.dol.gov/ebsa.
Chao v. Freedom Security Systems Inc. 401(k) Plan
Civil Action Number: 08-CV-3146
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