Compliance October 20, 2011

DoL Wins Right to Distribute Assets of Orphaned Plan

The U.S. Department of Labor (DoL) obtained a default judgment from the federal district court in Minneapolis allowing it to distribute $1.35 million from the defunct Northland Inn 401(k) plan.

Reported by

PLANADVISER staff

The judgment will require the appointment of an independent fiduciary to terminate the plan and distribute its assets.

The DoL filed a complaint against the fiduciary of the plan, Parkland Hotel Investors, in March of this year. The investigation found that the plan was abandoned after Parkland ceased operations in July 2009, and that assets totaling $1.35 million were not distributed to 96 plan participants (see “DoL Sues over Abandoned Plan”). Located in Minneapolis, The Northland Inn is currently operated by StepStone Hospitality.

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“Our legal action underscores the Labor Department’s commitment to hold accountable those who are entrusted with the assets of workers’ retirement plans,” said EBSA Assistant Secretary Phyllis C. Borzi. “We will continue to help workers obtain their rightful benefits when plan fiduciaries violate the law.”

The case is Solis v. Parkland Hotel Investors LP and the Northland Inn 401(k), Case No.11-00654.