Lawmakers probe MetLife's insurance for feds
By The Post's Federal Diary columnist Joe Davidson:
Two members of Congress who are central to federal workforce issues are questioning the practices of the insurance company that provides life insurance for federal employees.
Reps. Edolphus “Ed” Towns (D-N.Y.) and Stephen F. Lynch (D-Mass.) have sent a letter to MetLife CEO Robert Henrikson, asking him to explain his company's use of "retained asset accounts." Metlife is only provider of life insurance for federal civilian employees through FEGLI, the Federal Employees' Group Life Insurance program.
When a covered employee dies, the company places the insurance payment due to the beneficiary in one of the accounts, rather than providing a lump sum payment to the survivor. The beneficiary can withdraw from the account when the money is needed.
But here's the catch: MetLife earns more than 4 percent on the funds in the accounts, while paying beneficiaries only 1 percent, according to Towns, chairman of the House Committee of Oversight and Government Reform, and Lynch, chairman of the subcommittee on the federal workforce, Postal Service and the District of Columbia. Also, they said the accounts are not insured by the Federal Deposit Insurance Corporation.
The lawmakers said they are "concerned that some beneficiaries may not fully understand their right to obtain immediate, lump-sum payment of their benefits" and asked Henrikson to respond to a detailed list of 37 questions.
Read the letter below and leave your thoughts in the comments section:
| August 31, 2010; 10:00 AM ET
Categories: Congress, Workplace Issues
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