FL Pension Plan Accuses ING of Revenue Sharing Fraud
According to Bloomberg, the retirement plan set up for
the employees of the Orange County (Florida) Sheriff’s
Office claims that ING falsely characterized the payments
as reimbursement for services provided to the mutual funds.
The plan not only wants to recover the revenue sharing
payments and end the practice, but also wants the case to
have class action status, which would allow the plan to sue
ING on behalf of all similar deferred compensation plans
nationwide that bought group annuity contracts from ING’s
Hartford-based life insurance and annuity unit.
“The revenue sharing payments are calculated as a
percentage of plan participants’ assets invested in the
mutual funds through ING,” the plan said in its complaint,
according to Bloomberg. “Those amounts bear no relationship
whatsoever to the cost of providing the services or a
reasonable fair market value for the services.”
The claim by the Orange County Sheriff’s Office is its
second in recent months against a provider. The office sued
in November 2006 its former provider Nationwide Life
Insurance Co. in the US District Court in Columbus, Ohio,
charging that the firm would offer mutual funds to deputies
and other investors only if the family of funds also paid
the company a fee (See
FL Sheriff Sues Nationwide Over Fees
).
The Dutch bank had also been the target of an investigation
by former New York Attorney General Eliot Spitzer over its
fee structure. Spitzer alleged ING took fees in exchange
for promoting particular funds in retirement plans and
failed to disclose those fees (See
Spitzer Close to $33M Settlement with ING
over Fund Promotion
). ING agreed to a $33 million settlement in October.
A racetrack in Illinois recently sued Principal
Financial Group over its revenue-sharing practices,
alleging that the firm breached its fiduciary duties in its
arrangements with the mutual funds whose offerings are
included in Principal’s 401(k) product (See
Plan Sponsor Sues Principal over 401(k)
Fund Revenue Sharing
).
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