- The Washington Times - Tuesday, October 10, 2006

ALBANY, N.Y. (AP) — As many as 66,000 teachers in New York and about 5,000 state workers in New Hampshire will get an average of $450 apiece from a settlement with investment company ING, which paid fees to unions to steer business its way.

New York Attorney General Eliot Spitzer said yesterday the $30 million settlement ends his investigation of ING Groep NV, a Dutch company that had paid as much as $3 million annually in fees to the New York State United Teachers (NYSUT) union. Every teacher will receive at least $100. The agreement doesn’t cover New York City teachers who are represented by the United Federation of Teachers.

About 5,000 New Hampshire workers who participate in the state government’s version of a 401(k) plan, which is administered by ING, will share an additional $2.75 million in a deal reached earlier yesterday with state Securities Director Mark Connolly. ING has 60 days to come up with a plan for paying restitution, and it may or may not take the form of checks, Mr. Connolly said.

The company also agreed to explain its investment products and disclose costs and conflicts of interest in every state where it does business, using a one-page disclosure form negotiated with the two states, he said.

“This is a win for all investors,” Mr. Connolly said. “We believe we have developed a comprehensive disclosure statement, which will be an impetus for positive change throughout the entire retirement-planning industry.”

In June, NYSUT paid $100,000 and adopted reforms to settle charges by Mr. Spitzer’s office that it steered members to enroll in retirement plans that critics said charge high fees that erode returns. Union leaders weren’t targeted because the money from ING was spent on financial seminars, and they didn’t personally benefit from the arrangement, Spitzer spokesman Darren Dopp said.

Several teachers unions nationwide had deals with investment companies that some members say offered them poor investment products. The unions didn’t inform their members about the fees paid by the investment firms.

Mr. Spitzer said he wants the NYSUT agreement to set a new standard for transparency in the marketing of retirement plans such as a public worker version of the federal 401(k) plan, which allows employees and employers to contribute toward investment capital.

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