A participant in the Cedars-Sinai Medical Center 403(b) Retirement Plan has filed a lawsuit against Voya Retirement Insurance and Annuity Company, alleging that Voya “improperly profited” from stable value funds offered through annuity contracts. More specifically, the lawsuit claims that Voya set the crediting rate well below the internal rate of return (IRR) on the Plan’s deposits to the stable value accounts, therefore guaranteeing a substantial profit for Voya via the retention of the spread between the rates and/or the use of the spread for its own purposes. Further, the suit claims that Voya failed to disclose the amount of the spread to its retirement plan clients and their participants, thereby pocketing millions in undisclosed compensation. As of December 1, 2016, Voya defendants have filed a motion to dismiss. This case is not the only one filed of this kind recently; similar cases against both New York Life and MassMutual were filed during 2016.
www.plansponsor.com; December 2, 2016.