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The U.S. District Court for the Southern District of New York found that under the J&R Equipment, In. 401(k) Plan and Trust, Edward Klepeis was entitled to have his vested balance in the plan rolled over as of December 31, 2005. Klepeis asked Joseph T. Falanga, owner of J&R and sole trustee of the plan, to roll over his plan assets when he resigned in January 2005. Under the terms of the plan, Klepeis would be entitled to distribution on the next anniversary date—December 31, 2005. The court rejected the defendants' argument that Falanga was justified in ignoring Klepeis’ rollover request because it was not in the proper form, noting that the plan does not require formal claims for participants to receive benefits. According to the court opinion, when Klepeis complained in 2005 about Falanga’s unresponsiveness to his rollover request, Qualified Plan Consultants (QPC), the plan administrator told Klepeis that it needed only Falanga’s authorization, not a formal request by Klepeis. The court said Falanga, as a plan fiduciary with the duty to provide plan benefits to participants, should have given his authorization without unreasonable delay. In addition, the court found Falanga breached his fiduciary duty by failing to execute the subsequent written rollover requests. It rejected the argument that the refusal to execute the first written request was justified because it was untimely. The defendants point to no authority, in either the plan or the ERISA statute, for any timing requirement.
The U.S. District Court for the Southern District of New York found that under the J&R Equipment, In. 401(k) Plan and Trust, Edward Klepeis was entitled to have his vested balance in the plan rolled over as of December 31, 2005. Klepeis asked Joseph T. Falanga, owner of J&R and sole trustee of the plan, to roll over his plan assets when he resigned in January 2005. Under the terms of the plan, Klepeis would be entitled to distribution on the next anniversary date—December 31, 2005.
The court rejected the defendants' argument that Falanga was justified in ignoring Klepeis’ rollover request because it was not in the proper form, noting that the plan does not require formal claims for participants to receive benefits. According to the court opinion, when Klepeis complained in 2005 about Falanga’s unresponsiveness to his rollover request, Qualified Plan Consultants (QPC), the plan administrator told Klepeis that it needed only Falanga’s authorization, not a formal request by Klepeis. The court said Falanga, as a plan fiduciary with the duty to provide plan benefits to participants, should have given his authorization without unreasonable delay.
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