DOL chases down ‘orphan’ retirement funds — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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DOL chases down ‘orphan’ retirement funds

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in Human Resources

Here’s a trend to watch out for as the economy continues to slow: As companies go out of business, employees sometimes lose access to their retirement funds. It’s not a new problem, but it’s one the U.S. Department of Labor (DOL) is trying to fix.

For example, a new DOL lawsuit seeks to set things right for former employees of Nat Joseph Catering, which did business in Minneapolis. When the company filed for bankruptcy and ceased operations in 2004, it abandoned money that eight employees had put into a retirement plan. The fund is worth $29,000 now.

Such abandoned retirement plans are called “orphan plans” because no one is in charge of the assets. That means former employees can’t access their money.

The DOL is also going after Hyman Freightways, formerly of Mondsview. When it closed its doors in 1997, it held onto about $164,000 belonging to 14 employees.

Because the plans were apparently abandoned, the DOL suit seeks to appoint an independent fiduciary to help distribute the funds to the rightful owners.

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