Lost Employers

[Guest KathyS]

Has anyone dealt with an abandoned 401(k) plan? The Employer disolved the business in 1997. He did not terminate the 401(k) plan. He also did not provide participants with any distribution options. Participants are calling the investment company and Trustee to withdraw balances. The protoype document states that the Employer serves as the Plan Administrator. Further the Trustee is a "directed" trustee and can not process benefit payments without direction from the Employer. Finally, the TPA firm resigned from the account because the employer did not respond to any inquiries. It is assumed that 1997 deferrals were never deposited and form 5500s have not been filed for either 1996 or 1997. Any experience or guidance that you can share would be helpful. Also, are there any DOL guidance on this issue? I have found several cases were the PBGC stepped in to terminate the plan but nothing for 401(k) plans.

[Guest ESOPwizard]

If the trustee has reason to believe that the employer withheld 401(k) contributions and did not deposit them, I recommend that it immediately talk to its attorney regarding: (1) whether the matter should be referred to the US attorney for criminal action, (2) whether the matter should be referred to the DoL, and (3) whether there is any ability under state law to contest the liquidation of the company or to file a claim against the shareholders.

[Guest Bill]

The Trustee has the responsibility to protect the benefits of the plan participants, so they are not without obligation here. We have had this situation (we are a Trustee) and we have contacted the DOL after sending a notice to the Employer advising him that we were going to take that step. In two cases, they then signed the forms to allow distributions before the DOL got involved