February 14, 2018

MetLife CEO vows to correct pension payment troubles

PHOTO | MetLife
PHOTO | MetLife
The MetLife office in Bloomfield.

MetLife Inc., the New York insurer with Bloomfield operations, said it is working to correct a record-keeping problem that led to about 13,500 annuity plan holders not receiving monthly payments over an 11-year period.

As a result of the miscue, MetLife took a $70 million charge in the fourth quarter. Despite that, the life insurer still saw its fourth quarter profits increase to $2.1 billion, or $1.97 a share, compared to a loss of $2.2 billion, or $2.03 a share, in the year-ago period.

For the entire year, net income rose to $3.6 billion, or $3.38 a share, compared to net income of $627 million, or 57 cents a share, for the full year 2016.

MetLife first acknowledged in December that thousands of annuity policyholders did not receive monthly retirement benefits over the past 25 years due a records mistake in calculating pensions. In late January, in addition to the insurer's own internal probe, the U.S. Securities and Exchange Commission began investigating the matter.

"Although our underlying financial performance remained solid, the reserve charge [from the pension problem] and its impact on our fourth quarter and full year earnings — as well as the material weakness that led us to delay our earnings announcement — are unacceptable and deeply disappointing," said Steven A. Kandarian, chairman, president and CEO of MetLife. "We can and will do better."

Kandarian added that the firm is "rigorously addressing" the situation and is "committed to significantly improving our operational performance to better serve our customers and strengthen shareholders' confidence in our organization."

Total fourth-quarter revenues rose to $15.8 billion compared to $12.6 billion in the year-ago period. For the entire year, revenues rose to $46.2 billion from $44.5 billion the year prior.

CORRECTION: Annuity policy holders have not been receiving payments for a 25-year-old policy for about 11 years. The story had incorrectly stated the lapse was 25 years.

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