Equitable to Pay $50M for Misleading Teachers on Annuity Fees

What You Need to Know

The SEC says Equitable gave retirement investors the false impression that their quarterly account statements listed all fees paid.
About 1.4 million investors received the statements, according to the SEC.
The case involved Equitable’s proprietary “EQUI-VEST” variable annuities within 403(b) or 457(b) plans.

The Securities and Exchange Commission announced fraud charges late Monday against Equitable Financial Life Insurance Co. for providing account statements to about 1.4 million variable annuity investors that included materially misleading statements and omissions concerning investor fees.

Equitable agreed to pay $50 million to harmed investors, most of whom are public school teachers and staff members, to settle the charges.

Since at least 2016, Equitable gave investors the false impression that their quarterly account statements listed all fees paid during the period, according to the SEC’s order.

Most of the investors who received the account statements are teachers or other employees of kindergarten-through-12th-grade public school districts, who invest in Equitable’s proprietary “EQUI-VEST” variable annuities within a 403(b) or 457(b) defined contribution retirement plan, the order states.

Equitable “presented fees in several sections of its EQUI-VEST variable annuity account statements, including dollar values spread across various columns and rows, creating the false impression that all fees investors paid during the period were being detailed in the account statements,” the order states.

Equitable’s account statements, however, “excluded the most significant fees that investors paid from the fees listed on the account statements. Instead, the account statements listed as fees only certain types of administrative, transaction and plan operating fees — most often amounting to zero or a very small number — which were in fact only a slight fraction of the overall fees paid by the investor,” according to the SEC.