MetLife was charged with making false statements to investors on Monday (June 25) by the securities regulator in Massachusetts.
According to news from Reuters, citing Massachusetts Secretary of the Commonwealth William Galvin, MetLife allegedly provided false statements to investors about its failure to pay out pension benefits to retirees that it treated improperly as presumed dead. After an investigation, the state regulator lodged the charges against the company after MetLife said in December it didn’t make payments to retirees. Galvin’s office contends MetLife made statements that were misleading pertaining to the number of reserves it was required to have to meet the pension obligations.
In February, MetLife said it would increase the reserves by $510 million, Reuters reported, noting the impacted retirees who live both in and out of Massachusetts number around 13,500. The Massachusetts regulator wants MetLife to find all of the eligible retirees and to give them retroactive payments as well as to continue to make the payments. Reuters noted the regulator is also seeking sanctions and a fine.
In a statement, MetLife told Reuters it has “taken aggressive steps to locate unresponsive annuitants who are due funds and already have or will commence payment, including interest, once the necessary paperwork is complete.”
The investigation in Massachusetts is one of several looking into pension obligations. The Securities and Exchange Commission, as well as the New York insurance regulator, is also investigating the matter. According to the Massachusetts complaint against MetLife, the company didn’t make much of an effort to contact retirees, with the efforts including two letters, one at age 65 and another at 70 1/2.
When the retirees didn’t respond, MetLife presumed them to be deceased. At that point, the assets are released from reserve, which Galvin contends boosted the bottom line of MetLife.
“They weren’t dead at all,” Galvin said in an interview with Reuters. “No serious effort was made to find these people.”