ALBANY, N.Y., October 16 – Dutch insurance giant ING has agreed to pay $30 million and make sweeping reforms to settle a hidden influence charge over marketing practices of retirement products for 50,000 upstate teachers in New Yorks largest teachers union.

The settlement followed a yearlong investigation, by Attorney General Elliot Spitzers office, into the companys relationship with the New York State United Teachers (NYSUT). His office determined that ING has made payments of as much as $3 million to NYSUT as an inducement for the union to endorse and promote ING annuity plans. The full extent of these payments was allegedly not disclosed to members, nor were members aware that the union was steering them into the ING plan with biased investment advice.

As part of the settlement, ING will pay $30 million in restitution directly to NYSUT members who participated in the ING plan, a 403(b) plan. Each participant will receive a portion of the fund calculated on the basis of the participants investment history. The average payment will be approximately $450, but every teacher will receive at least $100. The agreement does not cover New York City teachers, who are represented by a different union.

NYSUT settled with the Attorney Generals Office in June, agreeing to a series of reforms and payment of $100,000 in costs.

The Attorney General said the agreement raises the bar for the entire retirement products industry. It will help ensure that workers receive accurate and complete information needed to make good investment decisions. In addition, the agreement provides significant compensation to teachers who received biased investment advice as part of an undisclosed agreement between ING and their union.

Under the settlement, ING agreed to set a new industry standard for retirement product disclosure by providing a cover page summary of all costs of each plan it offers. This will include a chart demonstrating the impact that these costs have on long-term investments. ING will also explain on the cover page that mutual fund managers often pay ING to have their funds appear on the menu of options offered to investors.

The agreement also provides another $3 million in restitution to New Hampshire, which cooperated in the investigation and settlement discussions.