The Department of Labor filed a lawsuit against a closed telemarketing company in Michigan, seeking to remove them as a retirement plan fiduciary so participants can obtain their retirement assets.
According to the Feb. 9 complaint, Martin J. Walsh vs. Associated Community Services Inc. and Associated Community Services 401(k) Profit Sharing Plan and Trust, the defendant, also known as ACS, breached fiduciary duty under ERISA on three counts regarding its 401(k) profit sharing plan and trust.
Labor Secretary Marty Walsh, who is named as the lead plaintiff in the lawsuit, will step down from his position in mid-March to become executive director of the NHL Players' Association.
ACS ceased operations and discontinued contributions in 2019; Richard Cole, its president, treasurer, secretary, and director, died on April 9; and the company officially dissolved on July 15. However, since 2019, ACS has failed to administer the plan and its assets, according to the lawsuit, which was filed in the U.S. District Court for the Eastern District of Michigan.
"By defendant ACS failing to administer the plan, participants of the plan have not been able to obtain distributions from the plan of their individual account balances," the complaint states.
As of May 3, the plan had $805,732.05 in assets for 43 participants, according to the lawsuit.
"To date, ACS has not terminated the plan or issued distributions to all of the plan's participants," the complaint notes.
Since at least September 2016, ACS acted as the plan sponsor, plan administrator and named fiduciary of the plan, according to the complaint. Fidelity Management Trust Company is the plan's trustee, record keeper and asset custodian.
According to Fidelity's basic plan document, a participant's vested interest in their account should be distributed upon employee termination, and "if there is a complete discontinuance of contributions, the employer or administrator shall direct the trustee to make distributions to the participants or other persons entitled to distributions," the lawsuit states.
The complaint asks the court to remove ACS as the plan fiduciary; appoint an independent fiduciary to properly terminate the plan and distribute its assets; pay the Labor Department for the costs of its action; and order any further relief.
ACS could not be reached for comment, as no working website or phone number could be found for the company. Fidelity declined to comment, as they are not a defendant in the lawsuit.