NYSUT - New York State United Teachers got away with a mere $100,000 penalty for intentionally taking "steps to conceal it." "It" being the fees and conflicts of interest that are so vary prominent in their ING Opportunity Plus program. ING pays NYSUT Member Benefits over $3 million annually to get the NYSUT endorsement.
The settlement also has some additional stipulations, as follows:
conduct open bidding for future retirement plan endorsements,
provide full disclosure of all payments from insurance companies,
provide free and impartial investment advice to members and allow them to roll over current savings to a new endorsed plan at no cost.
It will also hire an independent consultant to oversee reforms and report to the attorney general's office.
This is actually a decent settlement, but I am doubtful anything will actually change. Sptizer commented "A simple rule that my office has enforced time and time again is that fiduciaries must place the interests of their clients first." ING is clearly running the show and making the investment decisions, not anybody at NYSUT and ING is conflicted. NYSUT should hire an outside investment advisor to help them make investment decisions in the plan and bar ING from making those suggestions.
I will tell you this - if this was a public firm (like a fund company) the fines would be in the millions, people would be indicted, and ING would be in the hotseat, but Spitzer needs the NYSUT endorsement as he is running for Governor......talk about going soft on your buddies.
We'll keep on top of this and continue to hold NYSUT to a higher standard - though we are doubtful they will live up to it.