403(b)trayed
A class action suit has been filed on behalf of teachers who invested in a retirement plan offered by ING Life Insurance and Annuity Company and the New York State United Teachers Member Benefits Trust. The plan made headlines last year when it was revealed teachers were getting poor returns while ING was making payments to the NYSUT Trust to promote the program.
Under a settlement reached last year with then-Attorney General Eliot Spitzer, ING agreed to pay $30 million to the trust’s 55,000 beneficiaries. NYSUT agreed to ensure members were made fully aware of any compensated endorsements.
Forbes reports the class action suit could have widespread implications for both unions and investment firms, as it seeks to make such arrangements subject to the strict regulations of the Employee Retirement Income Security Act (ERISA).
Though all the fireworks went up last year, NYSUT’s endorsement deal with ING was not exactly new, and not exactly unknown, if you knew where to look.
