U.S. Labor Department secures order over $6.4 million Chicago law firm retirement plan payout failure

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Highlights

U.S. District Court entered a consent order on August 18, 2026, resolving $6.5 million retirement plan payout failures at McCullough, Campbell & Lane LLP.
Plan distributed $6,498,858 in assets to 40 employees, with $13,861 in remaining employer-level accounts to be distributed by the plan's recordkeeper.
The consent order permanently bars four former capital partners from serving as fiduciaries on any ERISA plan and transfers unclaimed balances to the PBGC's Missing Participants Program.

Court order finalizes plan wind-down

As reported by U.S. Department of Labor, citing the U.S. Department of Labor, the U.S. District Court for the Northern District of Illinois, Eastern Division, entered a consent order on Aug. 18, 2026, resolving claims against McCullough, Campbell & Lane LLP and capital partners David L. Joslyn, John W. McCullough, F. Dennis Nelson and Paul S. Turner.

The department said the defendants failed to follow a 2019 partnership resolution requiring the firm's retirement plan to be terminated and its assets distributed to employees, in violation of the Employee Retirement Income Security Act. After the Labor Department filed its complaint, the plan distributed $6,498,858 in assets to 40 employees.

The defendants have provided proof that plan assets were distributed to participants except for about $13,861 in employer-level plan accounts. Under the consent order, the plan's recordkeeper must distribute those remaining funds to participants and terminate the plan.

Compliance consequences and participant recovery

Employee Benefits Security Administration Regional Director Kelli Hammerl said the firm's former fiduciaries failed to provide workers with their promised retirement benefits after the law firm closed, adding that the Labor Department helped participants gain access to their retirement savings.

The order permanently bars Turner, McCullough, Nelson and Joslyn from serving as fiduciaries or service providers for any ERISA-covered employee benefit plan. The plan also transferred balances belonging to participants who could not be located to the Pension Benefit Guaranty Corporation's Missing Participants Program.

The Labor Department said employers can use EBSA correction programs, including the Voluntary Fiduciary Correction Program, to address violations and avoid excise taxes tied to prohibited transactions.

In our earlier article, we covered a Court of Appeal ruling in Malaysia that a commission-based “partner” at a law firm could be treated as a partner under the Partnership Act 1961 and held personally liable for an unpaid property-sale balance. The decision clarified that titles such as salaried or commission partner may still carry partner-level liability for firm obligations, with potentially wide implications for how law firms structure roles and responsibility.

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