Healthcare Strategies v. ING Life Insurance and Annuity Co.

Case Highlights

Status of the Case:

  • Plaintiff Healthcare Strategies, Inc. as the plan administrator to two 401(k) plans brought this action on behalf of itself and other similarly situated plans against ING Life Insurance and Annuity Company (“ILIAC”), alleging that revenue sharing payments received by ILIAC constitute prohibited transactions and violations of fiduciary duties under ERISA. The Plaintiff alleges that
    • (1) ILIAC has included certain mutual funds as investment options based on the funds’ revenue sharing payments to ILIAC rather than the funds’ potential to benefit the plans,
    • (2) ILIAC’s receipt of revenue sharing payments constitute prohibited transactions under ERISA 406(b)(3), and
    • (3) The fees charged by ILIAC to the plans do not bear a meaningful relationship to the cost of the services provided, and they thus constitute excessive compensation to ILIAC, and
    • (4) By taking as its compensation the spread between the guaranteed payment and the investment performance of assets in fixed accounts and guaranteed accumulation accounts, ILIAC has retained excessive compensation and engaged in self-dealing.
  • On January 12, 2012 ING’s motion to dismiss was partially granted striking allegations related to the fixed accounts and the guaranteed accumulation accounts.
  • On September 27,2012, class certification was granted under Rule 23(b)(3), certifying a class of plan administrators of all plans that have a group annuity contract or group funding agreement with ING.
  • Plaintiffs’ motion to dismiss counterclaims is pending. ING’s motion for summary judgment is pending. ING’s motion to decertify the class is also pending.
  • On June 24, 2013, the court denied ING’s motion to decertify the class.
  • On August 9, 2013, the court filed an order denying ING’s motion for summary judgment and indicating that at previous oral arguments, it also denied the plaintiffs’ motion to dismiss counterclaims.
  • Unless settled, the case is scheduled to go to trial in September 2013.

Issues:

  • Excessive Fees
  • Institutional Share Classes
  • Self-Dealing

Posts:

Key Defendants:

  • ING Life Insurance and Annuity Co.

Significant Filings:

Commentary:

Background

Court(s):

  • District of Connecticut
    • Case No. 11-282

Judge(s):

  • District Judge William G. Young

Defendants:

  • ING Life Insurance and Annuity Co.

Attorneys – Plaintiffs:

  • O’Neil Cannon Hollman DeJong & Laing, S.C.
  • Shepard Finkelman Miller & Shah, LLP

Attorneys – Defendants:

  • Morgan Lewis & Bockius, LLP
  • Pullman & Comley, LLC

 

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