ING settled with New York and New Hampshire regulators for paying up to $3 million a year to the teachers unions in those states to steer business its way.
ING's settlement with New York is for $30 million, while it is paying $2.75 million to New Hampshire. The money will be distributed back to the teachers in the plans, for an average payout of $450 apiece and a minimum of no less than $100 apiece for the teachers in New York.
As part of the deal, ING agreed to supply investors in all states with a one-page disclosure spelling out fees and conflicts of interest.
"This is a win for all investors," said New Hampshire Securities Director Mark Connolly. "We believe we have developed a comprehensive disclosure statement which will be an impetus for positive change throughout the entire retirement planning industry."
"This agreement raises the bar for the entire retirement products industry," said New York Attorney General Eliot Spitzer.
Barbara Roper, director of investor protection for the Consumer Federation of America, commented: "Revenue-sharing payments create unacceptable conflicts of interest by encouraging plan sponsors to select investment options based on the payments made rather than employees' best interests. It is long past time for the federal government to ban these payments."
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