Money

Massachusetts regulator accuses Metlife of fraud over unpaid pensions

BOSTON (Reuters) – Massachusetts’ securities regulator on Monday accused MetLife Inc of making false statements relating to its failure to pay pensions to hundreds of retirees in the state that it improperly treated as “presumed dead.”

Massachusetts Secretary of the Commonwealth William Galvin, the state’s top securities regulator, charged MetLife following a probe that began after the insurer revealed in December it had failed to pay pensions to potentially thousands of people.

In an administrative complaint, Galvin’s office accused MetLife of making misleading statements to investors regarding the sufficiency of its reserves to meet its obligations to pensioners.

The complaint seeks an order requiring MetLife to locate all Massachusetts retirees eligible for benefits and provide them retroactive and continuing payments. It also seeks sanctions, censure and an administrative fine.

New York-based MetLife did not respond to a request for comment.

MetLife had in December said the group missing out on the payments represented less than 5 percent of about 600,000 people who receive a type of annuity benefit from the company via its retirement business.

Galvin said in a statement his office was able to locate the majority of Massachusetts residents missing out on the payments within just a few weeks.

Around half of them were living at the same address New York-based MetLife had for them when the insurer failed to make payments to them after designating them as “presumed dead,” Galvin said.

“The payments to individual retirees may seem small to MetLife, but for the retired nurses, salesmen, shipbuilders, grocery clerks, and other seniors affected who are living primarily on social security, these payments were significant,” Galvin said.

Reporting by Nate Raymond in Boston; Editing by Chizu Nomiyama and David Gregorio

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