Guest JEP Posted July 13, 2001 Posted July 13, 2001 :confused: the sponsor of a 401k declares bankruptcy and is then unavailable to the plan participants. The court ordered bankruptcy trustee is unwilling to deal with the plan. Participants call wanting their money, but we have no authorized signature to distribute the assets. Any idea on how to proceed?
Steve72 Posted July 13, 2001 Posted July 13, 2001 Call the DoL. Now. You can get their number at http://www.dol.gov/pwba/dol
Guest JEP Posted July 13, 2001 Posted July 13, 2001 We can't really call the DOL as we administer the plan for the trustees. This is something that has occurred somewhat often and I was looking to see how other administrators are handling similar situations.
david rigby Posted July 13, 2001 Posted July 13, 2001 Forgive my ignorance, but why can't you call the DOL? I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
Guest JEP Posted July 13, 2001 Posted July 13, 2001 It is a stance we have taken since we have actually contracted with the trustee/company and not the participants. While we realize the participants are getting the short end of the stick, we feel we have a contractual obligation to the company. We have been backed into a corner by trustees and are looking for a way to handle it without whistleblowing on our own clients.
david rigby Posted July 13, 2001 Posted July 13, 2001 If there is a formal bankruptcy filing, it does not seem like there would be any whistle-blowing. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
rcline46 Posted July 13, 2001 Posted July 13, 2001 In these situations, we tell the participants that if they cannot locate the trustee, then call the DOL. We do not feel it is a problem since the company is effectively gone.
Guest JimD Posted July 13, 2001 Posted July 13, 2001 Here are some thoughts based on our experience. The sponsor/employer remains responsible for the plan. Communicate with the owner and/or Board member and/or Trustee if different. Advise them in writing of their responsibility and liability. Generally the employees know these persons and the employees should be advised that you cannot act without the employers direction. Advise the employees to contact these persons. We may consider waiving some fees (5500's, valuations) if that is an issue in making distributions. A participant can contact the DOL. Although sometimes it takes a long time the employer usually does what is required.
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