EBSA News Release: January 25, 2011
Contact Name: John M. Chavez
Phone Number: 617-565-2075
Release Number: 11-87-BOS/BOS 2011-026
US Labor Department obtains court-appointed independent
fiduciary for 401(k)
plan of defunct Westerly, RI, company
PROVIDENCE, R.I. – The U.S. Department of
Labor has obtained a court judgment and order appointing an independent
fiduciary to manage the 401(k) plan of defunct BlueSky Brands Inc. of
Westerly, R.I. The judgment and order resolve a lawsuit filed by the
Labor Department against the company for violations of the Employee
Retirement Income Security Act.
Under the judgment and order, the court appointed
Northeast Retirement Services Inc. of Woburn, Mass., to serve as the
independent fiduciary of the BlueSky Brands Inc. 401(k) Savings Plan.
The independent fiduciary has the authority to manage the plan,
distribute its assets to the plan’s participants and beneficiaries,
and terminate the plan. The judgment was entered in the U.S. District
Court for the District of Rhode Island.
“It’s doubly unfortunate when the closure of a
company results in workers both losing their jobs and access to the
retirement benefits they have earned,” said Edward Maloney, acting
regional director of the Labor Department’s Employee Benefits Security
Administration in Boston, Mass. “We took this legal action to ensure
that the plan is properly managed so that its participants can finally
gain access to their retirement assets.”
BlueSky Brands Inc. sponsored the 401(k) plan to
provide retirement benefits to the plan participants. Prior to ceasing
operations in March 2008, the company failed to take steps to ensure the
ongoing prudent administration of the plan, according to the Labor
Department’s suit. As a result, former employees of the company have
been unable to access their 401(k) accounts. Under ERISA, plans must be
managed by fiduciaries. In the absence of a plan fiduciary, participants
and beneficiaries cannot obtain plan information, make investments or
collect retirement benefits.
As of Aug. 31, 2010, the plan had 77 participants and
assets totaling $1,055,136.89, the latest data available. Fidelity
Investments is the custodian of all of the plan’s assets and will not
release those assets without the authorization of a plan fiduciary.
This suit resulted from an investigation conducted by
EBSA’s Boston Regional Office. The case was litigated by the Labor
Department’s regional solicitor in Boston. Employers and workers can
contact EBSA’s Boston office at 617-565-9600 or toll-free at
866-444-3272 for help with any problems relating to private sector
pension and health plans. Additional information can be found at http://www.dol.gov/ebsa.
Solis v. BlueSky Brands Inc.
Civil Action Number: 1:10-CV-00522-S
# # #
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