MetLife agrees to pay a $10 million fine to settle allegations it didn't make pension payments - and even mistakenly declared some workers deceased
- MetLife on Wednesday agreed to pay the SEC a $10 million fine to settle allegations it violated internal accounting rules in its annuities business.
- Thousands of workers didn't receive monthly pension benefits because of MetLife's errors, and the mistakes resulted in increased income for the company,the SEC said.
- One of the mistakes included assuming that annuitants "had died or otherwise would never be found" if they didn't respond to two mailed letters sent more than five years apart.
- Read more on Business Insider.
MetLife on Wednesday agreed to pay the Securities and Exchange Commission a $10 million fine to settle allegations it violated internal accounting rules in its annuities business.
Those errors meant that tens of thousands of workers didn't receive their monthly pension benefits, according to The Wall Street Journal. They also resulted in an increase in income for the company, the SEC said in a statement.
The mistakes included insufficient practices that in some cases prematurely marked workers as deceased. For more than 25 years, MetLife's practice was to "presume annuitants had died or otherwise would never be found if they did not respond to only two mailing attempts" made more than five years apart, according to the SEC.
To correct this error, MetLife increased its reserves by $510 million at year-end in 2017.
MetLife also overstated reserves while understating income related to variable annuities, according to the SEC. The company self-reported that the error was caused by data mistakes, and to correct it reduced reserves by $896 million at the end of 2017.
"Investors are entitled to the reliability and accuracy of financial information," said Marc Berger, Director of the SEC's New York Regional Office, in a statement. "The Commission found that MetLife's insufficient internal controls caused longstanding accounting errors."
The penalty fine from the SEC comes after two agreements that MetLife reached with state authorities in Massachusetts and New York over miscalculated pension payments, The Wall Street Journal reported. Those penalties totaled nearly $21 million, according to the report.
MetLife shares were little changed on the news, and are up roughly 24% year to date through Wednesday's close.
