The Department of Labor (DOL) successfully obtained a consent judgment to remove one company as fiduciary of its 401(k) plan and has sued a defunct nonprofit over another plan.
In the first case, DOL filed a complaint to remove Encorium Group Inc., formerly a global clinical research company, as fiduciary of the company's 401(k) plan. An investigation by the Employee Benefits Security Administration (EBSA) found that Encorium Group failed to terminate the plan, despite ceasing all business operations on or about October 2009.
Since the company ceased operations, neither it nor any of its former officers have taken fiduciary responsibility for the plan's operation and administration. That left its remaining participants in limbo.
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But no longer. On March 8, 2016, the court 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 Santa Monica, California-based Saakvitne to administer the plan, distribute plan assets to all affected participants and terminate the plan.
As of May 12, 2015, Encorium's plan had 33 remaining participants with individual account balances totaling $966,752.08, with the plan's assets currently held by State Street Bank and Trust.
EBSA also investigated the Philadelphia Committee for the Prevention of Blindness, which administered the Philadelphia Committee to Prevent Blindness Annuities Plan.
EBSA found that the committee violated the Employee Retirement Income Security Act when it failed to properly administer and terminate the plan when it ceased operations. Neither the committee nor any of its officers had taken fiduciary responsibility for the operation and administration of the plan, nor was anyone appointed to terminate the plan and distribute its assets to plan participants.
DOL has sued, seeking a court order to appoint an independent fiduciary to administer the plan, distribute plan assets to all affected participants and terminate the plan. As of December 31, 2014, the plan had three remaining participants with individual account balances totaling $42,448.24. Mutual of America Life Insurance Company currently holds those assets.
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