According to the Los Angeles Times, the NYSUT gets $3 million a year from Dutch investment company ING for recommending members enroll in an annuity with high fees that lower overall returns. A letter from FERA president Thomas Carroll asks Spitzer to seek restitution for investors who have been harmed by the deal, according to the Associated Press.
The letter also asks that NYSUT be prohibited from accepting payments for endorsing products of investment firms. The Times reports that a NYSUT spokesman said the arrangement benefits members because it helps pay for the union’s benefits department and other services.
A Spitzer spokesman acknowledged receipt of the letter and said his office plans to review the situation thoroughly.
In addition, the Times said the country’s largest teachers union, The National Education Association (NEA), is also receiving payment in return for steering members to financial products. In 2004, the NEA collected $50 million in royalties for such arrangements.
The Times recent series of stories on retirement plan fees is here . A free registration is required.