Matthew Hutcheson, who advises companies on their retirement plans, told Congress that managers of the $3.2 trillion in U.S. 401(k) plans should adhere to "the highest ideals of society."
"The fiduciary duty is the highest duty known to the law," Hutcheson, 41, said in testimony before the House Ways and Means Committee in October 2009. As an independent fiduciary, Hutcheson helps manage company retirement plans, picking investments and monitoring their operations. The legal requirement of a fiduciary is to always put the best interests of the client first.
Rodney Thompson, co-owner of Thompson Audiology in Yakima, Washington, said Hutcheson fell short of his own standards. Thompson and his employees had more than $1 million invested in a 401(k) plan called the G Fiduciary Retirement Income Security Plan, and Hutcheson was the fiduciary -- the person minding the assets. The money was supposed to be transferred in June to a new plan that Hutcheson ran.
The funds never arrived and Hutcheson told him they were in an investment that he couldn't sell immediately, Thompson said. Thompson said he pressed Hutcheson for weeks, to no avail. In August, he filed a complaint with the U.S. Department of Labor, which regulates 401(k)s. The agency is investigating Hutcheson, Labor Department spokesman Michael Shimizu said.
"This is money that our employees are counting on," Thompson said in an interview. "He preached transparency, and he's not being transparent at all."
'Robbery'
David Novak, a dentist in North Carolina, said his practice is missing $275,000 that it had in the G Fiduciary plan.
"If his lips are moving, he's lying to you," Novak said in an interview. "If he had a gun, it would be robbery."
Through his attorney, Hutcheson denied any wrongdoing.
"All of the allegations are baseless," said Dennis Charney, a lawyer in Eagle, Idaho. "We will address this in court at the right time but do not feel a newspaper is the forum to try pending and future lawsuits."