Following an internal review of Metlife showed that it had been missing pension payments to retirees of various companies. The insurance giant found in their records that more than 13,500 recipients were owed payments they never received. Missed payments dated back up to 25 years, and now Metlife is making plans to pay off those missed pension payments. Metlife has set aside $510 million to begin paying of missed pension payments with interest. At the heart of the problem was Metlife’s communication practices. Metlife only made minimal efforts to contact recipients when they turned 65 and then when they turned 70, if it didn’t get in contact with them Metlife would mark the payments as undeliverable.
Metlife itself reported the missed payments to regulators. Said that it found “material weaknesses” in their business practices that allowed for payments to be missed over 25 years. The annuities in this case were purchased as pension plans for pension funds, but Metlife stated that it had problems finding the retirees because many of them left their companies years after they were eligible to start receiving payments. As a result, Metlife had to delay the release of its earnings report for the end of 2017 and restate previous earnings reports to account for missed payments. Now it is expected to have a significant drop in their earnings, and Metlife stock has begun to fall. Metlife is facing probably its biggest crisis in years. Future earning will suffer as it makes preparations to pay retirees for missed payments, but it will most likely lose business too. Many of its customers will probably leave or investigate whether they too have been affected my missed payments, and new customers will lose confidence in Metlife and look elsewhere for their pension benefit needs. Businesses need to be prepared to focus their efforts on delivering goods and services that they are paid for, Metlife failed at this and will most likely lose customers and see decreased earnings for years to come. A company that does not deliver will not be able to survive, let alone thrive.