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Release Date: October 12, 2007
Release Number: 07-1308-SAN (SF-122)
Contact Name: Deanne Amaden
Phone Number: 415.625.2630
San Francisco – The U.S. Department of Labor has obtained a
default judgment appointing an independent fiduciary to distribute
$60,000 in assets from an abandoned 401(k) profit-sharing plan to 15
former employees of Zoltrix Inc., a defunct Fremont, California-based
manufacturer and distributor of computer components.
The order gives the fiduciary, Larry Lefoldt, of Lefoldt & Co.,
authority to distribute the assets to participants and beneficiaries
before terminating the plan. Zoltrix ceased operating in early 2001
without appointing an individual to serve as a trustee or administrator
of the plan. The company abandoned the plan after it went out of
business. Plans become “orphan plans” when they are abandoned by
fiduciaries designated to manage and operate them and their assets.
“Abandoning this 401(k) plan resulted in abandoning the workers who
invested their retirement savings in it,” said Francis C. Clisham,
regional director for the Labor Department’s Employee Benefits
Security Administration (EBSA) in San Francisco. “We took this legal
action so the plan participants can access their retirement funds.”
This judgment follows a lawsuit filed by the department in January
2007, alleging that plan participants were unable to access their plan
accounts or receive benefit distributions because neither the company
president, Jimmy Wong, nor anyone else with authority to administer the
plan could be located.
To assist workers in similar situations, the Labor Department
instituted new rules in May 2006 to facilitate a voluntary, safe and
efficient process for winding up the affairs of abandoned plans. The new
rules allow financial institutions to take responsibility and distribute
the assets of 401(k) plans to affected workers and their families. The
department estimates that 1,650 such plans are abandoned each year.
This legal action resulted from an investigation conducted by EBSA’s
San Francisco Regional Office. 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.
Employers and workers can contact the agency’s San Francisco office at
415.625.2481 or EBSA’s toll-free number, 1.866.444.EBSA (3272), for
help with problems relating to private sector pension and health plans.
Chao v. Zoltrix, Inc. and Zoltrix Inc. 401(k) Profit Sharing Plan
Civil Action 3:07-CV-0610-WHA, United States District Court for Northern
District of California
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.
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