For 25 years, thousands of retirees living in Massachusetts were not paid their retirement annuity benefits because the insurance company responsible for it assumed they were dead. You read that right, MetLife insurance simply stopped paying them.
In late June of this year, Massachusetts Secretary of the Commonwealth William Galvin filed a formal complaint, finally drawing needed attention to this egregious activity.
For two and a half decades, the insurance mega company had not paid about 13,500 participants in its group annuity population. As MetLife itself admitted, “companies that are or have been MetLife Inc. subsidiaries established a practice of releasing the full insurance liability after two attempts at contacting these annuitants, based on the presumption that these annuitants would never respond and had not become entitled to benefits…”
So after sending an annuitant two measly letters, sometimes five years apart, and failing to get a prompt response, MetLife would immediately deem the retiree deceased and cut off all payments, thereby benefitting their own bottom line at the expense of retirees’ earned assets. Mr. Galvin’s office, while investigating the matter, was able to locate most of these retirees “fairly easily,” and stated that MetLife made “no sincere effort” to find them. No
phone calls, no emails, no certified mail.
How hard were they really trying? Everyone, no matter how diligent, occasionally misses a piece of mail. This is especially true of retirees, many of whom move, travel, or spend significant time away from their homes receiving medical treatment. This should not be a crime, nor should it be grounds to lose your entire lifeline— money that retirees worked hard to earn and that their families greatly depend on. Due to the increasingly popular corporate practice of “de-risking,” or “pension stripping” as we prefer to call it, many more of our members now receive annuities than in the past.
You may remember 2012, when 41,000 Verizon retirees’ pensions were spun off in one fell swoop, converted to annuities managed by Prudential, which is, in many ways, a similar company to MetLife. Both are large insurance companies with teams of high-powered accountants and lawyers looking for cost-cutting loopholes. Though the Association of BellTel Retirees doesn’t have MetLife’s budget, we have our members’ backs and can arm them with information. We are deeply troubled by MetLife’s recklessness and encourage you to consider the regulatory conditions—or lack thereof—that allowed them to rob their annuitants for 25 years.
These are the same conditions and lack of oversight that allow companies like Verizon to offload their pensions en masse in the first place without the necessary safeguards for retirees If you’re alarmed by these trends please support the Association so that we can work on your behalf to try to prevent this type of corporate misbehavior and defend your interests when it does. Don’t wait until it’s too late!