U.S. Labor Department Obtains Judgments Involving Southfield, Mich., Business 401(k) and Pension Plan Funds

Source: U.S. Department of Labor (DOL)

The U.S. Department of Labor has obtained two default court judgments against the trustee of the benefit plans of a now-defunct Medicare services provider in Southfield, MI leading to the termination of the company's 401(k) and pension plans so that $1,155,943 in assets can be distributed to participants.

"Workers and their families have been counting on these benefit plans to help fund their retirements," said Secretary of Labor Elaine L. Chao. "Fortunately in this case the department was able to recover all of the money in the benefit plans, more than $1.1 million, and it will be distributed to the participants and beneficiaries."

The original lawsuits alleged that the plan trustee, who was also the co-owner of the Medicare services company, failed to take steps to terminate the company's plans and distribute the assets to participants and beneficiaries after the company ceased doing business. As of Nov. 30, 2006, the company’s 401(k) Savings Plan and Trust had $570,294.42 in assets and 77 participants. The company’s Money Purchase Pension Plan held $585,648.75 in assets for 64 participants.

The default judgments appoint an independent fiduciary to manage the plans, terminate them and distribute the assets to eligible participants and beneficiaries.

The judgments, entered in federal district court in Detroit, resulted from an investigation conducted by the Cincinnati Regional Office of the Labor Department's Employee Benefits Security Administration (EBSA). In fiscal year 2006, EBSA achieved monetary results of $1.4 billion related to pension, 401(k), health and other benefits for millions of American workers and their families.

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