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Compliance March 16, 2011
DoL Sues over Abandoned Plan
March 16, 2011 (PLANSPONSOR.com) – The U.S. Department of Labor (DoL) has sued a now-defunct company with allegations it walked away from its 401(k) plan without distributing $1.3 million in assets to 96 participants.
Reported by Fred Schneyer
A news release from the department’s Employee Benefits Security Administration (EBSA) said Parkland Hotel Investors, fiduciary of the Northland 401(k) plan, abandoned the plan in July 2009 when it shut down operations. As a result of the abandonment, participants and beneficiaries are unable to communicate with the plan fiduciary or obtain distributions from their accounts, according to the EBSA.
“Workers deserve to keep the benefits they have earned regardless of a fiduciary’s business status,” said Phyllis C. Borzi, assistant secretary for EBSA, in the announcement. “The department is taking action to ensure that these plan participants have access to the benefits owed to them.”
The suit was filed in federal district court in Minneapolis.