NYSUT Investors Get ING Refund

By HOWARD MEGDAL

More than 55,000 members of the New York State United Teachers will receive an average refund of $450 apiece from the investment group ING, under an agreement between the firm and Attorney General Eliot Spitzer's Office last week.

The reimbursements will cover those who invested in ING's 403(b) Opportunity

Plus program between Jan. 1, 2001 and June 30, 2006. Mr. Spitzer fined NYSUT $100,000 earlier this year for accepting millions of dollars in payments from ING in exchange for promoting the firm's program over those with lower member fees.

'Welcome Development'

"The ING settlement is a welcome development that should result in more transparent 403(b) offerings throughout the industry, a move that will benefit all NYSUT members," union president Richard C. Iannuzzi said in a statement.

Refunds will be at least $100, and will rise depending on the amount that members invested. The agreement does not cover members of the United Federation of Teachers, who were not a part of the ING program.

NYSUT beginning in 1989 received payments from Aetna Life Insurance and Annuity Company to promote its 403(b) program, and then from ING more recently. Meanwhile, the union had failed to review alternative plans since 1998.

The Attorney General's Office found that over a 12-year period, contributions of $10,000 yielded as much as $17,000 less than one competing 403(b) plan, because of the much-higher administrative fees. While NYSUT members paid 3.59 percent of their annual assets for administration, other programs charged as little as 0.35 percent.

As part of the union's settlement with Mr. Spitzer's office, NYSUT hired David Pratt, a benefits expert from Albany Law School, to oversee the choice of programs available to members.

'Completely Transparent'

"Basically, the concept is we've moved into a period now where complete transparency is the standard," Mr. Iannuzzi said. ING has 60 days to produce a plan for payment, and the reimbursements must occur within 120 days of the Oct. 10 settlement.

Critics of Mr. Spitzer, the Democratic nominee for governor, have questioned his handling of the NYSUT investigation, claiming he let the union off easy because of the union's endorsement of his campaign. Mr. Spitzer's spokesman, Darren Dopp, said that union leaders at NYSUT weren't targeted for investigation because they hadn't personally profited from ING's payments.