ING Life Insurance and Annuity Co. will pay retirement plan clients $5.2 million as part of a settlement with the Department of Labor over charges that ING kept the gains from transaction processing errors for roughly 1,400 retirement plans.
Labor Department officials said in a statement Mondaythat ING's clients were not made aware of ING's policy of reconciling transaction processing errors based on contract date rather than trading date, and of keeping the gains from transactions. ING's contracts required it to make plans whole for any trading losses. The transactions involved in the settlement took place from 2008 to 2011.
The Windsor, Conn.-based ING also agreed to pay a $524,509 penalty to the government.
The lack of disclosure was a violation of the Employee Retirement Income Security Act, according to the DOL. As part of the settlement, ING agreed to disclose its policy on how it corrects transaction processing errors; but in a statement, ING said it communicated its policy to sponsors as part of fee disclosures in July 2012 and in a recent sponsor mailing. “Our long-standing policy has been to put customers in the position they would have been in had a processing error never occurred,” the ING statement said.
The Labor Department “has reason to believe that other service providers may be engaging in similar impermissible conduct, but there is no reason to believe the practice is widespread,” said a spokesman.
