Under the settlement agreement, ING will deposit $14.95 million into a common fund to provide compensation relief to the class of plaintiffs. The class includes administrators of ERISA retirement plans with which ING has maintained a contractual relationship based on a group annuity contract or group funding agreement and for which, since February 23, 2005, ING has received revenue-sharing payments.

The settlement also requires ING to make a number of changes to its business practices, including additional disclosures to plan sponsors of fund additions, removals and substitutions, and disclosures of fund-related fees and expenses. The settlement requires ING to eliminate language in disclosures that “Revenue-sharing payments neither directly nor indirectly increase mutual fund expenses” and replace it with language that “Revenue-sharing payments may have a direct impact or indirect impact on mutual fund expenses …” The settlement calls for future retirement plan clients to be offered the specific opportunity to pay all fees to ING directly by choosing a plan menu for which the firm does not accept any revenue-sharing payments from mutual fund companies.

In February 2011, Healthcare Strategies filed the lawsuit, saying ING had entered into revenue-sharing agreements with various mutual funds, affiliates of mutual funds, mutual fund advisers and others in which it received kickbacks for its own benefit (see “ING Facing Revenue Sharing Suit”). In its complaint, Healthcare Strategies claimed the revenue-sharing payments had the effect of increasing the expense ratios of mutual funds offered in its 401(k) plan and all other plans similarly situated. According to the suit, while ING described the payments as service fees, “the amount of the revenue-sharing payments [bore] absolutely no relationship to the cost or value of any such services.”

Details of the settlement agreement are here.