Compliance March 16, 2011

DoL Sues over Abandoned Plan

The U.S. Department of Labor (DoL) sued a now-defunct company alleging it walked away from its 401(k) plan without distributing $1.3 million in assets to participants.
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The DoL 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, 96 participants and beneficiaries are unable to communicate with the plan fiduciary or obtain distributions from their accounts, according to 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. “The department is taking action to ensure that these plan participants have access to the benefits owed to them.”

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The suit was filed in federal district court in Minneapolis.

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