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ERISA case against ING is example of big company getting it wrong

Life insurance and annuity giant ING reached a settlement with the labor department for $5.2 million. That money will go toward compensation for the retirement plan clients of ING due to the company’s failure to process transactions in a timely manner. The company retained gains on investments, instead of handling transactions that would have allowed the clients to retain those gains.

This is a violation of ERISA, which governs employee benefits. Retirement accounts are part of those benefits, which is what caused ING’s poor choices to fall under that guideline. Transaction processing errors were rampant throughout ING, and in the future the company must also disclose the policies it has for its transactions as part of the settlement.

There are nearly 35,000 clients that are covered by ING, making the settlement a large and significant one for employment and insurance law. Any plan losses that were seen based on incorrect transactions were required to be reimbursed, and ING did so, but it also kept gains from these transactions and did not pass them along to clients. That was where the violation occurred.

Now that ING must be more forthcoming about its policies, more companies and individuals will be able to determine whether they want ING to handle their accounts or whether they will be better served by a different company. The possibility exists that ING will lose many accounts because of the perceived lack of trust now seen with the company, but consumers and employers will have to make their own choices for the future of their money.

Our attorneys have experience fighting for clients against some of the biggest companies, ING being one of them, when they wrongfully deny disability and insurance claims. Visit our Disability Lawyers page to learn more about our experience facing top insurance companies.

Source: Bloomberg BNA, “ING to pay $5 million to settle allegations of ERISA disclosure violations,” Pension & Benefits Daily, February 5, 2013

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