Compliance August 9, 2023

DOL Lawsuit Alleges Participant Assets Locked by Fiduciaries

The department is seeking access to retirement assets owned by employees of a closed time-share-properties business in Houston.

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Retirement plan participants have saved total assets of $199,296.10 held in four accounts of the Summit Opportunities LLC 401(k) P/S plan, but they cannot access any of it, the Department of Labor alleged in a lawsuit filed in Texas federal court on Tuesday.

The DOL sued shuttered time-share-properties business Summit Opportunities LLC; president, director and owner Fanny Lourdes Treviño, who was also the named plan trustee; and the Summit Opportunities LLC 401(K) P/S Plan, alleging plan fiduciaries abandoned the profit-sharing plan, locking out participants from accessing their assets.

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The plan sponsor has ceased operations, and neither Treviño nor anyone on the plan sponsor’s behalf has been willing to terminate the plan and authorize account rollovers or distributions for the remaining plan participants, according to the complaint.

“Participant account rollovers and distribution requests cannot be processed and the Plan cannot be terminated without direction from a fiduciary,” the complaint states. “Defendant Trevino has ignored requests from the Plan’s service provider seeking direction and authorization and has not authorized anyone to act in her place.”

The complaint in Julie A. Su v. Fanny Lourdes Trevino and Summit Opportunities LLC 401(K) P/S Plan filed in U.S. District Court for the Southern District of Texas, Houston Division.

Efforts by the Dallas regional office of the Employee Benefits Security Administration to reach Treviño to have her terminate the plan and arrange for the participants to obtain distributions or rollovers of their respective account balances have proved unsuccessful, according to the DOL. Treviño is also a participant account holder, according to the complaint.

The complaint asks the court to appoint a new independent fiduciary for the 401(k) plan and enforce provisions of the Employee Retirement Income Security Act.

EBSA solicited bids from prospective independent fiduciaries and recommended JM Pension Advisory Inc. be appointed to serve as an independent fiduciary to terminate the plan and distribute its assets to the plan’s participants.

This is the fifth separate enforcement lawsuit brought against retirement profit-sharing plans in 2023 by the DOL. Three of the previous lawsuits made substantially similar allegations that the plan sponsor abandoned responsibility for the plan by preventing access to employees’ retirement savings.

The Summit Opportunities plan was established on January 1, 2005, and administered at all times in Houston, according to the complaint.

The DOL did not return a request for comment. Neither Treviño nor representatives of the Summit Opportunities LLC 401(K) P/S Plan could be reached for comment.

Compliance August 9, 2023

EBSA Announces Additional Fiduciary Compliance Seminars

The upcoming seminars will be held in Fort Wayne, Indiana, and Omaha, Nebraska. 

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The Department of Labor’s Employee Benefits Security Administration is hosting two more retirement plan compliance assistance seminars as part of its “Getting It Right—Know Your Fiduciary Responsibilities” series.  

The seminars will be held in Fort Wayne, Indiana, and Omaha, Nebraska, on August 22 and September 28, respectively. According to EBSA, the programs will “increase awareness and understanding about basic fiduciary responsibilities when operating a retirement plan.” 

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Previous EBSA seminars were recently held in Buffalo, New York, and Las Vegas. 

EBSA argued that “getting it right” is especially challenging for small and midsize employers who have limited time, resources and access to professional help with benefit programs.  

Topics covered in both seminars will include understanding plans and responsibilities; carefully selecting and monitoring service providers; making contributions on time; avoiding prohibited transactions and making appropriate disclosures to plan participants; and filing timely annual reports to the government.  

EBSA’s program combines free seminars around the country with educational materials and a dedicated page on EBSA’s website. 

Registration for the free seminars is on a first-come, first-served basis. For the Fort Wayne event, located at the Grand Wayne Convention Center, registration runs through August 18. For the Omaha event, located at the Hilton Omaha, the registration deadline is September 26.  

An agenda for both events can be found on the DOL’s website.  

Seminar partners include the Society for Human Resource Management, the National Federation of Independent Business, the U.S. Small Business Administration and the American Institute of Certified Accountants.  

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