The New York Times (Registration Required) reports on a federal lawsuit filed in Washington State that contends the National Education Association (N.E.A.) union has been overcharging for fees associated with annuities offered its members:
Lawyers representing the plaintiffs said they had been unable to calculate the total payments received by N.E.A. officials from Nationwide and Security Benefit since 1991, when the products were first endorsed by the organization. But a recent Security Benefit prospectus indicated that fees paid to N.E.A. Member Benefits might exceed $2 million a year. That prospectus said Security Benefit paid the N.E.A. subsidiary $510,000 a quarter.
The suit, filed in United States District Court for the Western District of Washington at Tacoma, said that such payments were not disclosed to N.E.A. plan participants. Instead, N.E.A. Member Benefits maintained that it selected Nationwide and Security Benefit based on competitive criteria, the suit said.