The Department of Labor announced Monday that it had reached a settlement agreement with ING Life Insurance and Annuity Co. (ILIAC) that provides for a $5.2 million payment to certain retirement plan clients adversely affected by ILIAC’s failure to disclose investment gains achieved when the company failed to process requested transactions in a timely manner.
The department alleged that ILIAC’s failure to disclose its policy on reconciling transaction processing errors to retirement plan clients was a violation of the Employee Retirement Income Security Act.
Acting Labor Secretary Seth Harris said in a statement that this “settlement will restore funds to about 1,400 retirement plans and ultimately benefit hardworking Americans who are making sacrifices now in order to save for their retirement years.”
Harris continued: “All of us who are planning for retirement deserve to know how our savings and investments are being handled, how much is being charged in fees and how much these transactions impact final account balances.”
Phyllis Borzi, assistant secretary of labor for EBSA, said in the same statement that the settlement “is reflective of my agency’s commitment to enforcing requirements for transparency in the retirement savings marketplace. Failure of a plan fiduciary to disclose the revenue it received from managing retirement plans is a disservice to employers who are providing this benefit to their workers.”
The agreement announced Monday also requires ILIAC to disclose its policy on how it corrects transaction processing errors to plan clients covered by ERISA and to adopt procedures for terminating abandoned plans through the EBSA’s Abandoned Plan Program. In addition, ILIAC has agreed to pay a $524,508.73 civil penalty.
ILIAC released a statement the same day stating that the company is “pleased to have resolved this matter with the Department of Labor in a way that benefits our client plans and participants, and various stakeholders. Our longstanding policy has been to put customers in the position they would have been in had a processing error never occurred.”