NYSUT’s 403(b) Legal Problems Not Over Yet

It’s a distant memory now, but back in 2006 New York State United Teachers was under the gun for promoting high-fee ING 403(b) annuities to members without revealing the investment giant was paying the union to do so. The practice had been going on for years. Then-New York State Attorney General Eliot Spitzer filed charges, prompting ING to settle for $30 million. NYSUT got off with a $100,000 payment. An excellent summary of the investigation and settlement is posted on the Foundation for Education Reform & Accountability web site.

Some NYSUT members, backed by the law firm of Keller Rohrback, thought that was an insufficient amount and filed a class action suit against NYSUT. The suit alleges “breaches of fiduciary duty, aiding and abetting a fiduciary breach, and unjust enrichment.”

Keller Rohrback filed a similar suit against NEA’s Member Benefits Corporation in 2007.