Archived News Release — Caution: Information may be out of date.
New York – The U.S. Department of Labor has filed a lawsuit asking the U.S. District Court for the Southern District of New York to appoint an independent fiduciary to oversee the abandoned 401(k) plan of American Financial Services Inc.
The company, which was located at 2 World Trade Center in Manhattan, ceased operations following the terrorist attacks of Sept. 11, 2001. At that time, the plan trustee stopped performing his duties and the president of the company did not appoint a successor fiduciary. The Employee Retirement Income Security Act (ERISA) requires that employee benefit plans be managed by named trustees. Without a trustee, plan participants and beneficiaries cannot obtain information, or access accounts to make investments or collect retirement benefits.
The Labor Department’s suit asks the court to appoint an independent fiduciary to administer the plan, distribute the plan’s assets to participants and beneficiaries, and oversee the plan’s termination. As of February 8, 2006, the plan had 10 participants and $22,288.67 in assets. Travelers Insurance Company is the custodian of the funds.
“Sadly and unfortunately, the company that sponsored this plan went out of business, apparently as a direct result of the terrorist attacks of 9/11,” said Jonathan Kay, regional director in New York for the Labor Department’s Employee Benefits Security Administration (EBSA). “We took this legal action only so that the plan can again be properly managed and its participants can access the funds that rightly belong to them.” The suit resulted from an investigation by EBSA’s regional office in New York. Employers and workers can contact the office at 212.607.8600 or toll-free at 1.866.444.EBSA (3272) for help with problems relating to private sector pension and health plans. In fiscal year 2006, EBSA achieved monetary results of $1.4 billion related to pension, 401(k), health and other benefits for millions of American workers and their families.
Chao v. American Financial Services Inc. 401(k) Plan Civil Action Number: 07-CV-4845 U.S. Department of Labor news releases are accessible on the Department's Newsroom page. The information in this news release will be made available in alternate format upon request (large print, Braille, audio tape or disc) from the COAST office. Please specify which news release when placing your request at 202.693.7828 or TTY 202.693.7755. The U.S. Department of Labor is committed to providing America's employers and employees with easy access to understandable information on how to comply with its laws and regulations. For more information, please visit the Department's Compliance Assistance page.
Archived News Release — Caution: Information may be out of date.
