According to the Wall Street Journal, ING is expected to shell out $30 million to theNew York state teachers who invested through ING and $3 million to New Hampshire state employees for failing to disclose the fees to retirement plan participants.
In addition, the expected settlement requires ING to provide full disclosure of its fee structure to investors and provide new information about the payments it collects for including other companies’ funds in its retirement plans – neither of which are now required, according to the WSJ.
With the terms of the settlement still pending and the Dutch insurer still denying any wrongdoing, ING has already agreed to adopt these changes for all its pension plans in the US.
Spitzer’s investigation of ING began in May (See NY Attorney General To Investigate 401(k) Investments ), alleging the New York State United Teachers union struck a deal with ING Group in which the union gets $3 million a year from ING if it recommends members enroll in an annuity with high fees and lower overall returns.
ING has not been the only firm the New York attorney general has scrutinized for such practices. The Harford Financial Group agreed to a $20 million settlement in May, after admitting that it made improper payments to insurance brokers to recommend its annuities to pension plans. The Connecticut broker reaped $800 million in pension plan annuity business as a result (See Hartford Agrees to $20M Annuity Sales Scandal Settlement ).
Fee disclosure has been under increased scrutiny in recent weeks as nine corporations, including behemoths Boeing Co.and Lockheed Martin, now face lawsuits alleging they failed to monitor and disclose fees to retirement plan participants (See Details Reported on Boeing 401(k) Fee Suit ).