Reuters
Published Dec 19, 2018 09:18AM ET
MetLife settles Massachusetts case over unpaid pensions
By Nate Raymond
BOSTON (Reuters) - MetLife Inc (NYSE:MET) will pay a $1 million fine to resolve claims that it made misleading statements to investors in failing to pay pension benefits to thousands of retirees it improperly treated as "presumed dead."
Massachusetts Secretary of the Commonwealth William Galvin announced the settlement on Wednesday. The deal resolves an administrative case that Galvin's office filed against MetLife in June.
As part of the settlement, Galvin's office said that MetLife will provide payments, with interest, to hundreds of Massachusetts retirees and beneficiaries.
In an administrative complaint, Galvin's office accused MetLife of making misleading statements to investors regarding the sufficiency of the reserves it was required to maintain to meet its obligations to pensioners.
Following December's revelation, MetLife said in February it would increase the reserves by $510 million. The company has estimated that the number of retirees affected, both in and outside Massachusetts, is about 13,500.
"Our focus since we self-identified and self-reported this issue has been to enhance our processes so that we deliver better service to our customers," MetLife said in a statement. "This settlement is in line with that focus."
The case centers on MetLife's business over the last several decades of acquiring the assets of employer pension plans and converting them into group annuity contracts in a process called pension risk transfer.
Galvin's complaint said MetLife relied on inadequate procedures to contact retirees, many of whom may not have known the company took over the pension responsibilities.
MetLife contacted them primarily by sending two perfunctory letters at age 65 and 70-1/2. When retirees did not respond to them, MetLife categorized them as "presumed dead," the complaint said.
By marking someone as "presumed dead," the assets to which the retiree was entitled were released from the reserve, increasing MetLife's bottom line, Galvin alleged.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.