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| NYSUT Member Benefits Trust agrees to change practices June 13, 2006 ALBANY, N.Y. June 13, 2006 - In a settlement announced today between the New York State United Teachers Member Benefits Trust and Attorney General Eliot Spitzer, the Trust has agreed to reform the way it markets and manages 403(b) voluntary investment programs. The settlement centers on the Trust's endorsement process and disclosure of fees by the Trust for its endorsement of Opportunity Plus, a 403(b) tax-deferred annuity marketed by ING Life Insurance and Annuity Co. NYSUT President Richard C. Iannuzzi welcomed the attorney general's recommendations, noting they are compatible with changes he had asked the Trust to make prior to the attorney general's review. "It's clear now that the Trust, despite its best intentions, historically could have - and should have - provided greater disclosure of the fees paid to the Trust by ING. Mistakes were made. They will not be made again," said Iannuzzi, who was elected NYSUT president in April 2005, three days before Spitzer began his investigation. "The Trust has informed me it has agreed to every recommendation," said Iannuzzi. "This is a positive step forward. The attorney general has given the Trust a road map to reform, and the Trust will follow it." At Iannuzzi's request, the NYSUT Member Benefits Trust will make changes beyond the attorney general's recommendations, including the appointment of an outside, independent panel to ensure compliance with the terms of the settlement and to review all Trust procedures and policies. Panel members will be named shortly. The Trust is exploring every option to provide the best possible benefits to participants. The NYSUT Member Benefits Trust is a not-for-profit trust established as a separate legal entity to provide voluntary benefit programs to members. No NYSUT member dues are used to support the Trust, and NYSUT does not profit from the operations of the Trust. The NYSUT Member Benefits Trust has been cooperating with the attorney general's office since the inception of the investigation. While the investigation focused on the marketing and disclosure practices associated with the 403(b) program, there was no suggestion that any individual in the Trust or in NYSUT personally profited from this or any program. The Trust has agreed to immediately implement the attorney general's recommendations for reforms in its marketing and endorsement process for the 403(b) program. Those reforms include:
The Trust will also reimburse the attorney general's office the $100,000 cost of the investigation. "We will bring complete openness and transparency to the Trust's processes," Iannuzzi said. "High standards must be upheld. I am committed to ensuring the NYSUT Member Benefits Trust meets those standards. That is in the best interests of our members." Approximately 53,000 individuals participate in the ING 403(b) offerings through the Member Benefits Trust. The United Federation of Teachers, United University Professions and Professional Staff Congress do not participate in the Trust-endorsed 403(b) programs; their employers offer different options. The NYSUT Member Benefits Trust has extended its phone hours from 9 a.m. through 8 p.m. Monday through Friday to respond to questions from Opportunity Plus participants at 1-800-626-8101. A link to the complete agreement between the attorney general's office and NYSUT Member Benefits Trust will be available online at www.nysut.org. NYSUT, the largest union in New York state, represents more than 535,000 classroom teachers and other school employees; academic and professional faculty at the state's community colleges, State University of New York and City University of New York; and other education and health professionals. NYSUT is affiliated with the American Federation of Teachers, AFL-CIO. -30- |
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