DOL Seeks Removal of 401(k) Trustee

The Department of Labor (DOL) hopes to remove the trustee of a 401(k) plan based in Elgin, Illinois.

In December, the DOL filed a lawsuit, Perez v. Aguirre et al. (docket number: 1:13-cv-08948), in the U.S. District Court for the Northern District of Illinois, Eastern Division. The suit names Eugene Aguirre, as well as the Sunstrand Electric Company Inc. Employees 401(k) Profit Sharing Plan and Trust, as defendants. 

The suit alleges that since August 2010, Aguirre, the sole trustee to the Sunstrand Electric Company Inc. Employees 401(k) Profit Sharing Plan and Trust, failed to administer the plan. This included failure to properly authorize distributions to plan participants and beneficiaries. As a result, participants have not been able to obtain distributions of their account balances, totaling $100,734, from the plan.

It is further alleged by the DOL that in failing to administer the plan, Aguirre failed to discharge his duties solely in the interest of the participants and beneficiaries, for the exclusive purpose of providing benefits to participants and beneficiaries, and to defray reasonable expenses for plan administration, all of which violates the Employee Retirement Income Security Act (ERISA).

The suit asks that Aguirre be prevented from violating ERISA in the future by removing him from his position as plan trustee; removing Sunstrand from its position as plan administrator; permanently enjoining Aguirre and Sunstrand from serving as fiduciaries or service providers to any ERISA-covered plan; appointing an independent fiduciary to distribute the plan’s assets and then terminate the plan; and ordering Aguirre to pay all reasonable fees and expenses incurred by the independent fiduciary in administering and terminating the plan.

According the DOL, the plan had nine participants as of October 15, 2012.

The full text of the DOL suit can be downloaded here.