MetLife will pay $1 million and change contact and payment procedures for participants whose pension benefits were transferred to a MetLife group annuity contract.
A complaint by Massachusetts Secretary of the Commonwealth William F. Galvin alleged, “After the transfer, MetLife’s only contact with the pensioners was two form letters, sent more than five years apart, to those to whom payments were owed. MetLife designated plan participants who did not respond to the notices that were sent to the address on file as presumed dead. Once a plan participant was presumed dead by MetLife, the money to which the retiree was entitled was no longer held in reserve by the company and became assets of MetLife, which were reported in public filings. The complaint states that these reserves should not have been released and resulted in misleading financial statements.”
Galvin said his office was able to locate a majority of the missing Massachusetts residents within just a few weeks, and approximately half of these seniors were still living at the same address MetLife had on file for them for the entire time it failed to make payments.
A consent order from the state says MetLife neither admits nor denies violations of law; however, in December 2017, it announced that it was “undertaking a review of practices and procedures used to estimate reserves related to certain… annuitants who have been unresponsive or missing over time.” In a Form 8-K filing with the Securities and Exchange Commission (SEC), MetLife disclosed that the business was improving its process to locate these annuitants.
The order outlines in detail steps MetLife will take to identify the so-called “missing” annuitants and pay them, or if the annuitants never respond, to provide certification of this with a document of all steps taken to find them.A lawsuit in which a would-be class representative whose benefit liability was transferred to MetLife in a pension risk transfer (PRT) deal challenges the company’s practices across its PRT and group annuity contract services business is still ongoing, according to the docket report in the U.S. District Court for the Southern District of New York.