Court Appoints Fiduciary for 401(k) Plan

The order comes after the Department of Labor (DOL) filed a lawsuit, Harris v. Windswept Environmental 401(k) Plan (civil action number: 2:12-cv-06179-JS-WDW), in the U.S. District Court for the Eastern District of New York. The suit petitioned the court to appoint an independent fiduciary to administer the plan and distribute assets to participants and beneficiaries, following the death of the plan’s sole fiduciary.

The order from the federal district court appoints M. Larry Lefoldt as an independent fiduciary to manage the 401(k) plan of the defunct Windswept Environmental Group Inc.

The 401(k) plan was established in May 2001. The plan’s administrator, trustee and sole fiduciary, Michael O’Reily, died in November 2008, and Windswept Environmental ceased operations in February 2009. As a result, no one was administering the 401(k) plan, and certain former employees of the company did not receive a distribution of their promised benefits.

Under the Employee Retirement Income Security Act (ERISA), plans must be managed by fiduciaries. In the absence of a plan fiduciary, participants and beneficiaries may not be able to obtain plan information, make investments or collect retirement benefits. In this case, the plan has 12 participants and more than $129,000 in assets.

The lawsuit resulted from an investigation conducted by DOL’s Employee Benefits Security Administration (EBSA).