New York officials are hoping an agreement they have hammered out with a large insurer will establish a model for retirement program fee disclosures.

Lawyers in the office of New York Attorney General Eliot Spitzer negotiated the settlement agreement with ING Life Insurance and Annuity Company, Atlanta, a unit of ING Groep N.V., Amsterdam, to resolve an investigation into complaints about past retirement plan fee disclosure practices.

ING is neither admitting nor denying Spitzer’s allegations, but the company has agreed to pay $30 million in disgorgement and restitution to 66,000 members of the New York State United Teachers union and $3 million in restitution to 5,000 state workers in New Hampshire.

ING also has agreed to include comprehensive, one-page retirement plan cost disclosures with every solicitation or account opening package for ING products aimed at 401(k), 403(b), 403(b)(7) and 457 retirement plans.

A sample disclosure included as an exhibit with the settlement agreement starts out by warning the consumer, “This retirement plan is not free.”

“ING and the funds offered in the product charge various fees and expenses,” the disclosure states. “Many fund companies pay ING in return for being offered as investment options, as well as for the recordkeeping and related services ING provides. Funds are selected based on the revenue they pay to ING and on ING’s assessment of their quality and cost.”

In the second paragraph, ING will estimate what percentage of the average account balance goes to pay fees each year.

A table at the bottom of the form shows how product fees might affect the product’s end-of-year balance over a 20-year period.

“This agreement raises the bar for the entire retirement products industry,” Spitzer says in a statement about the settlement agreement.

Regulators in Spitzer’s office say ING and New York United Teachers, a union that represents teachers working in districts north of New York City, failed to inform union 403(b) plan members that ING was paying $3 million per year to the union to reward it for promoting ING group annuity plans.

The union settled with Spitzer’s office in June and has agreed to pay $100,000 in investigation costs.

The New York restitution recipients will include any teachers union members to participated in union-endorsed products at any point between Jan. 1, 2001, and June 30, 2006.

The average restitution payment will be $450 per teacher or New Hampshire state worker, but every restitution recipient will receive at least $100, officials say.

“ING takes its regulatory responsibilities very seriously and seeks to work cooperatively with regulators,” the company says in a statement. “ING is pleased to have these matters resolved and fully supports improved transparency and disclosure.”