U.S. Labor Department sues to compel trustees to manage abandoned Warren, Rhode Island 401(k) plan

Archived News Release — Caution: Information may be out of date.

Boston – The U.S. Department of Labor has sued to obtain a court order requiring the trustees of the abandoned 401(k) pension benefit plan of the Warren, Rhode Island-based VikinGlobal Corp. to properly administer the plan. The suit also seeks to distribute more than $12,000 in plan assets to eligible participants and beneficiaries.

The department’s lawsuit, filed in the U.S. District Court for the District of Rhode Island, alleges that plan trustees Robert Anderson and Mark Schmidt violated their fiduciary duties under the Employee Retirement Income Security Act (ERISA) during the period from October 1, 2002, to the present. Anderson and Schmidt were co-owners of the plan sponsor, VikinGlobal, which ceased operations in early 2002. Since then, participants and beneficiaries, who are mainly former employees of the company, have been unable to gain access to or obtain information about their individual account balances.

Plans become “orphan plans” when they are abandoned by all fiduciaries designated to manage and operate them and their assets. The plan had 13 participants and approximately $12,000 in assets being held by custodian BlackRock Funds.

“The department took legal action to ensure that the participants receive their promised benefits,” said James Benages, director of the Boston Regional Office of the department’s Employee Benefits Security Administration (EBSA), which investigated the case.

The suit asks the court to permanently enjoin defendants Anderson and Schmidt from serving as fiduciaries to any ERISA-covered plan other than the VikinGlobal Corp. 401(k) Plan; to require them to administer the plan, and distribute the plan’s assets to participants and beneficiaries, and then to terminate the plan.

The department’s legal action resulted from an investigation conducted by EBSA’s Boston Regional Office. Employers and workers can contact the Boston office at 617.565.9600 or toll-free at 1.866.444.EBSA (3272) for help with any 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. Additional information can be found at www.dol.gov/ebsa.

Chao v. VikinGlobal Corp.
Civil Action Number: CA 07 364 S

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Archived News Release — Caution: Information may be out of date.