Madoff 401(k) Funds Being Used to Terminate Plan

As if working for Bernard L. Madoff Investment Securities wasn’t stigma enough, benefits consulting firm Hooker and Holcombe is using 6% of the money in the bankrupt company’s 401(k) plan to cover the $100,000 cost of winding it down. Across the board, every account in the plan is being deducted by that percent.

“That’s what we’re all incensed about,” Carolyn Maloney-Hastillo, who worked for Madoff for a decade, told The Hartford Courant. “That’s not right. For me, that’s $2,000 gone.” Furthermore, the value of the Madoff plan included company stock, and even though that is now worthless, it has inflated Hooker and Holcombe’s fees, attorneys representing the employees argue.

Attorney General Richard Blumenthal is investigating the West Hartford., Conn., company, even though the practice of tapping into 401(k) assets to terminate a plan is perfectly legal. “Certainly, our hope is the company will do more than comply with the minimum with the law,” the attorney general told the paper.