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Compliance March 23, 2016
Defunct Company Retirement Plan Owes Nearly $1M to Participants
The company ceased all business operations in 2009, but failed to take the appropriate steps to terminate the plan.
Reported by Rebecca Moore
The U.S. Department of Labor (DOL) has secured a consent judgment appointing an independent fiduciary to oversee the 401(k) of a now defunct biopharma company.
An investigation by the DOL’s Employee Benefits Security Administration found Encorium Group Inc., formerly a global clinical research company, ceased all business operations on or about October 2009, but failed to take the appropriate steps to terminate the plan. Since then neither the company, nor any former officers of the company, have taken fiduciary responsibility for the plan’s operation and administration.
As of May 12, 2015, the plan had 33 remaining participants with individual account balances totaling $966,752.08—assets held by State Street Bank and Trust.
The U.S. District Court for the Eastern District of Pennsylvania approved a consent judgment removing the company as plan fiduciary and appointing Saakvitne Law Corp. as the plan’s independent fiduciary. The judgment authorizes the firm to administer the plan, distribute plan assets to all affected participants and terminate the plan.