The U.S. Department of Labor (DOL) is asking the courts to order equitable relief for participants in an Interactive Marketing Group profit sharing plan, and to enjoin the plan’s sole trustee from alleged ongoing violations of ERISA Title 1.
The complaint was filed in the U.S. District Court for the District of New Jersey, naming as defendants the Interactive Marketing Group, Inc. 401(K) Profit Sharing Plan and Guruprasad Pai, “the sole trustee of the plan and a fiduciary with respect to the Plan within the meaning of ERISA Section 3 (21)(A), 29 U.S.C. § 1002(21)(A).”
Complaint documents show the plan in question is an “employee pension benefit plan within the meaning of ERISA § 3(3), 29 U.S.C. § 1002(3) and is covered by ERISA, pursuant to ERISA § 4(a), 29 U.S.C. § 1003(a).” The plan was sponsored by Interactive Marketing Group, Inc., with the last known address in Paramus, New Jersey, and was established on or about January 1, 1987.
“On information and belief, Guruprasad Pai served as the sole trustee of the plan since it was established,” DOL says in its complaint. “Guruprasad Pai was the only individual with signatory authority and the only trustee of the plan, pursuant to ERISA § 3(21), 29 U.S.C. § 1002(21).”
Following inquiries from concerned beneficiaries of the plan, DOL explains that it cannot get a response from Pai, who stopped servicing the plan more than a year ago without naming a successor trustee.
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“At all times relevant during this action, Guruprasad Pai was the only fiduciary to the Plan with responsibilities for its administration, distribution of assets and day to day management,” DOL explains. “On information and belief, Interactive Marketing Group Inc., stopped doing business on or before December 15, 2014. Guruprasad Pai stopped performing fiduciary duties on or about [that date] and did not ensure the appointment of a new fiduciary to manage the plan or oversee the distribution of the plan’s assets. The plan has not been formally terminated.”
The plan’s assets are in custody at State Street Bank and Trust Company, which “has been the custodian of the Plan assets at all times relevant to this litigation.” As of May 26, 2015 the value of the plan assets held at State Street totaled $753,309.
“Without a duly appointed trustee or other fiduciary of the plan to instruct an asset custodian to distribute the plan’s assets, the plan’s participants are unable to obtain distributions of funds from the plan,” DOL says.
To solve these issues, DOL wants the court to appoint an independent trustee and fiduciary to administer the plan and distribute the plan’s assets to its participants and beneficiaries, and to order “such further relief that is appropriate and just.” As is customary in these cases, DOL also wants to bar Pai from gaining any new responsibilities for servicing ERISA-covered retirement plans.
Read the compliant here.