MetLife failed to pay some pensions

[meierlde]

It is a wonder the pension accounts did not get turned over to the unclaimed property operation in the state the person was last known to be living in. Properly after 5 or so years after eligibility if no contact they should be turned over. All states take over unclaimed property after some time. In the case of a pension it should likley be at age 76 or so as at age 70.5 one is supposed to take the pension. It is no different than life insurance companies not seeking to find out if folks have died, i.e. if you don't know about the policy well they will keep it. (At least till you reach 100 when it may go to the state in question)

 

[MichaelB]

Reuters reported a company exec saying this

“Given the size and the age of our block of business, there are inevitably some customers we can’t locate for a number of reasons, but that number is small,”

Well, 2% is definitely not small. IMO this is an unacceptable attitude for an insurer in the business of managing finances and financial risk for individuals.

 

[jazz4cash]

It is a wonder the pension accounts did not get turned over to the unclaimed property operation in the state the person was last known to be living in. Properly after 5 or so years after eligibility if no contact they should be turned over. All states take over unclaimed property after some time. In the case of a pension it should likley be at age 76 or so as at age 70.5 one is supposed to take the pension. It is no different than life insurance companies not seeking to find out if folks have died, i.e. if you don't know about the policy well they will keep it. (At least till you reach 100 when it may go to the state in question)

No, they waited up to 25 yrs until the beneficiary approached 65 to send a letter notifying them of the pension. If no one responded they sent another at RMD date. It's a pension so only the employee or spouse are entitled to the proceeds. Met assumed they were deceased and moved the assets to their bottom line. Nothing to turn over to the state.

 

[Big_Hitter]

It is a wonder the pension accounts did not get turned over to the unclaimed property operation in the state the person was last known to be living in.

that's not how it works; in a qualified plan termination annuities are purchased for those that can't be found or handed over to the pbgc. Most of the time annuities are purchased.

what exactly would be escheated to the state? this isn't a 401k balance

 

[pb4uski]

I wonder if they ever tried just googling the pensioner? They could probably figure out that they were not dead through the SS database using the SS# (assuming that they had it).

 

[Lakewood90712]

Must suck to be a Met Life Exec. for the next couple of years, seeing the bonus cookie jar empty . Largely due to the act's of predecessors.

 

[jazz4cash]

I wonder if they ever tried just googling the pensioner? They could probably figure out that they were not dead through the SS database using the SS# (assuming that they had it).

According to the piece I linked they only used US Mail, 1st class of course.

 

[jazz4cash]

Now the sharks are circling. There are several law firms going forward with class actions on behalf of shareholders. I haven't seen one for the pensioners, though.

 

[pb4uski]

That seems odd but I guess it is what the plaintiffs bar does. What claim would shareholders have? While $584 million is a lot, that is over 25 years... even if some years of earnings were overstated by $40 million that is not material to MetLife's total earnings.

Anyway, below is a link to their earnings call where they talked about this problem. It seems that some rocket scientist decided to write off reserves for pensioners that they could not locate... I will say that writing off reserves like this is uncharateristic of the MetLife that was my client... they were pretty straight shooters in accounting judgements in my experience working with them but it is a large organization with a lot of moving parts.

https://c-6rtwjumjzx7877x24x78jjpnslfqumfx2ehtr.g00.nasdaq.com/g00/3_c-6bbb.sfx78ifv.htr_/c-6RTWJUMJZX77x24myyux78x3ax2fx2fx78jjpnslfqumf.htrx2ffwynhqjx2f9691183-rjyqnkj-rjy-v9-7562-wjx78zqyx78-jfwsnslx78-hfqq-ywfsx78hwnuyx3fx78tzwhjx3dsfx78ifv_$/$/$?i10c.ua=1

 

[jazz4cash]

That seems odd but I guess it is what the plaintiffs bar does. What claim would shareholders have? While $584 million is a lot, that is over 25 years... even if some years of earnings were overstated by $40 million that is not material to MetLife's total earnings.

Anyway, below is a link to their earnings call where they talked about this problem. It seems that some rocket scientist decided to write off reserves for pensioners that they could not locate... I will say that writing off reserves like this is uncharateristic of the MetLife that was my client... they were pretty straight shooters in accounting judgements in my experience working with them but it is a large organization with a lot of moving parts.

https://c-6rtwjumjzx7877x24x78jjpnslfqumfx2ehtr.g00.nasdaq.com/g00/3_c-6bbb.sfx78ifv.htr_/c-6RTWJUMJZX77x24myyux78x3ax2fx2fx78jjpnslfqumf.htrx2ffwynhqjx2f9691183-rjyqnkj-rjy-v9-7562-wjx78zqyx78-jfwsnslx78-hfqq-ywfsx78hwnuyx3fx78tzwhjx3dsfx78ifv_$/$/$?i10c.ua=1

I agree with you even though I hold a few shares and qualify for the class action. As you say, it's what the lawyers do. I don't even think the share price has been affected that much by the disclosure. The claim is that buyers were deceived due to the faulty/deceptive practice of booking the funds that should have been held in reserve as profit. At the end of the day the lawyers will get more out of this class action than the share holders. One of the notices I saw from a law firm was a form letter that had Metlife in the title but they failed to change the name of the target in the body of the notice.