My Fiduciary Will Not Listen

[Guest CJS]

My company has run into some financial trouble lately so I have seen my ESOP value decrese to $0 after being with the company for 15 years. I have only recently started to look at how my plan was administrated and I have found what I belive to be a major mistake.

My plan document has the following statement in the distribution article, "The balance of a Participant's Accounts shall not include any Company Stock acquired after December 31, 1986 with the proceeds of an Acquisition Loan until the Plan Year in which such loan is paid in full."

In 1998 a loan was taken out for the remaining 51% of the company. This loan should have been paid off in 2005. For years 1998--present when a participant "Put" his shares he was paid for his entire balance, old shares plus the new financed shares. I am in a heated discusion with my fiduciary telling him that according to IRC 409 (o)(1)(b) he should not be paying for financed shares. Those shares he does not need to start paying on till 2005. He will not listen and is in the process of terminating the plan ASAP.

I'm looking to recapture money that may have been overpaid. I reason that if my company plan is terminated, that extra money could be distributed to the remaining employees that have "old" shares.

HELP my retiement is in the toilet.

[RLL]

Hi CJS ---

It's extremely difficult for anyone to give you meaningful advice based solely upon your quoting one sentence of one article of your "plan document." And a message board such as this is not really the proper place to obtain the type of guidance that you seek.

I recommend that you seek the advice of legal counsel experienced in dealing with ERISA and ESOP benefit claims and alleged fiduciary violations. Be prepared to provide copies of all available documents and more precise information regarding this ESOP's loan and administrative practices (including the benefit distribution policy). As an alternative, you might want to contact the local office of the U.S. Department of Labor's Employee Benefits Security Administration (if you don't mind the frustrations of dealing with federal bureaucrats).

Good luck.

[rcline46]

Also note that if the termination is filed with the IRS, you must receive a notice, and that notice tells you where to file an exception to the termination of the plan.

[Guest CJS]

We have been sent a notice from the Trustee that says the plan will not be submitted to the IRS for termination. Is that standard procedure and is that legal?

The notice also goes on to say that a claim will not be filed in bankruptrcy court on the current ESOP participants behalf. If we want to file a claim ourself, we can fill out the court form that he included with this termination notice. When I called looking for assistance in how to fill this out he didn't even have a copy in front of him. I have expressed my dissatisfaction with this lack of fiduciary guidance in a certified letter to the Trustee, CEO, TPA, DOL, and the legal firm that is serving as counsel in this termination process.

I have been dealing with the DOL for 3 months now and it seems like they are not interested.

Would you like my entire list of complaints?