DOL Appoints New Fiduciary for New York 401(k) Plan

As a result of a lawsuit filed by the DOL, Perez v. David J. Hardy Construction Co. Inc. 401(k) Plan (civil action number: 5:13-CV-536 [FJS/DEP]), the U.S. District Court for the Northern District of New York authorized that M. Larry Lefoldt, of Lefoldt & Co. PA, be appointed as an independent fiduciary to the 401(k) plan of the defunct David J. Hardy Construction Company of Syracuse. With his appointment, Lefoldt can administer and distribute assets to plan participants and beneficiaries.

According to an investigation by the DOL’s Employee Benefits Security Administration (EBSA), the retirement plan was created in July 1992 by the Hardy Construction Company, which went out of business in June 2008. All assets of the company were sold at bank auction in August 2008. Hardy, the plan’s sole trustee, filed for bankruptcy in January 2010. Since 2008, no individual has come forth to assume fiduciary responsibility for the plan or to distribute the plan’s assets to participants. As such, the DOL filed their suit against the plan in May 2013, seeking appointment of an independent fiduciary.

Under the Employee Retirement Income Security Act (ERISA), plans must be managed by fiduciaries and their assets must be held in trust by trustees. Lacking a plan fiduciary and trustee, participants and beneficiaries cannot obtain plan information, make investments or collect retirement benefits. The Hardy Construction Co. 401(k) plan has 19 participants and more than $270,000 in assets, according to the EBSA.