The state treasurer’s office and Metropolitan Life Insurance Co. have settled a federal lawsuit that the state agency filed over death benefits for thousands of railroad workers.
Treasurer Tim Shallenburger and the company announced the agreement Wednesday. It could affect the families or heirs of up to 7,600 Kansas railroad workers and tens of thousands more across the nation.
The agency filed its U.S. District Court lawsuit in February, seeking permission to audit the MetLife records, citing its authority to collect unclaimed property. Shallenburger worried that the families or heirs of many deceased railroad workers didn’t know they were eligible for a $2,000 payment under MetLife group life policies.
A MetLife spokeswoman said the company had no problems with paying the benefits but challenged the authority of Shallenburger’s office to audit its records. The company didn’t view the unpaid benefits as unclaimed property.
Under the settlement, MetLife agreed to set up a program to notify railroad workers and families of the potential death benefits, which were first included in contracts between railroads and labor unions in 1966.
Neither Shallenburger nor the company had estimates for exactly how many families in Kansas or across the nation would receive the benefit, or what the total payout could be. If benefits were due to families or heirs of half the railroad workers in Kansas, the amount would be $7.6 million.
“We believe there will be a lot of money in the next year going to people in Kansas,” Shallenburger said during a news conference.
In New York, MetLife spokeswoman Karen Eldred said the two sides put aside the legal question of whether Shallenburger’s office could audit MetLife’s records to reach the settlement.
“Our goal has always been to, basically, pay all eligible claims,” she said. “We had the same goal as the treasurer.”
MetLife agreed to publish notices in union and federal Railroad Retirement Pension Board newsletters and on state insurance department Internet sites.
Also, the unclaimed property program in Shallenburger’s office plans to post on its Internet site a list of railroad workers whose families or heirs might be eligible for benefits. Shallenburger said that list should be up within a month.
Shallenburger and MetLife listed 20 unions whose workers received group life policies as part of their employment agreements, including the Brotherhood of Locomotive Engineers, the International Association of Machinists and Aerospace Workers, and the United Transportation Union.
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