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Agreement Reached In Pension Lawsuit

New York Life to Contribute to Employee and Agent Retirement Plans

Plaintiffs’ Counsel Credits Company for Addressing Matter

NEW YORK, N.Y., OCTOBER 29, 2007 – New York Life Insurance Company and attorneys for plaintiffs and the class today announced an agreement to settle a class action lawsuit filed in 2000 that will result in contributions to the company’s employee and agent retirement plans.

The total value of the settlement, including attorneys’ fees, is $14 million. The bulk of this money will be deposited in the company’s retirement plans to directly benefit the plans’ participants, who comprise the settlement class. The plan trustees also are agreeing that they will continue to receive independent advice on their investments through May 31, 2010.

The federal court lawsuit in Philadelphia, Mehling, et al. v. New York Life Ins. Co., et al., Civ. Action No. 99-5417 (E.D Pa.), alleged, among other things, that the New York Life retirement plans were imprudently invested by the plan trustees in proprietary mutual funds offered by the company.

Defendants, including New York Life and the Boards of Trustees of the plans, denied the allegations and asserted that the plans' investments, or menu of investment options in the case of the 401(k) plans, have at all times been prudently selected. ERISA does not prohibit the investment of a retirement plan’s assets in proprietary mutual funds offered by the plan's sponsor provided that the investments and fees are appropriate.

The four plans involved in the settlement are a defined benefit pension plan for agents and one for employees; and a 401(k) defined contribution savings plan for agents and one for employees. The settlement class consists of some 35,000 current and former participants in the 401(k) plans who had a 401(k) account balance at any time during the period January 1, 1994 to December 31, 2005, and the approximately 32,000 current or former employees or agents who were participants in the defined benefit plans as of December 31, 2005.

After attorneys’ fees and administration costs are deducted from the $14 million settlement amount, 70% of the remainder will be deposited in the 401(k) defined contribution plans and 30% in the defined benefit plans. The 401(k) plans’ proceeds will be distributed to qualifying 401(k) plan participants in a one-time lump sum payment based on a formula that is based on the amount of participants’ account balances. Current and former agents and employees who qualify will receive payments under the settlement between $50 and $1,000. The two defined benefit (or, traditional pension) plans will receive deposits that will not increase benefits paid to individual participants but will strengthen the funding of the plans and participants’ retirement security.

On October 25, 2007, Judge Bruce W. Kauffman of the United States District Court for the Eastern District of Pennsylvania, Philadelphia, granted preliminary approval of the settlement. Judge Kauffman could grant final approval of the settlement early next year following the final hearing currently set for January 22, 2008.

Before submitting the settlement to the court for preliminary approval, the parties agreed that two independent fiduciaries would be appointed to represent the plans to ensure that the settlement terms are fair and reasonable. The two independent fiduciaries reviewed the facts of the case, the law applicable to the claims and the proposed settlement agreement and concluded that the settlement terms are fair and reasonable.

“After the court dismissed several claims, the parties were able to move closer and resolve the remaining issues. The company’s receptivity to a settlement centered on the fact that the bulk of the settlement monies would go to work for the affected employee and agent participants in the plans. The result is a reaffirmation of New York Life’s commitment to its employees and agents through the company’s highly competitive benefit and pension plans. New York Life’s defined benefit pension plans have a track record of being funded well in excess of funding required by the federal government. The additional proposed funding under the settlement agreement will only further enhance the plans’ strong funding position,” said William Werfelman, a spokesman for New York Life.

Eli Gottesdiener, one of the attorneys for plaintiffs and the class, hailed the settlement as providing meaningful relief for participants. Gottesdiener said, “While we continue to believe participants were overcharged for investment management services, we appreciate the willingness of New York Life and the Trustees to address the issue, and receive independent advice on how the plans are invested in the future. We are confident that on a going-forward basis, the plan participants will be treated fairly as a result of this suit and settlement.”

Plaintiffs and the Class are represented by attorneys Eli Gottesdiener, Gottesdiener Law Firm, PLLC, Brooklyn, NY; Marc I. Machiz, Cohen, Milstein, Hausfeld & Toll, PLLC, Philadelphia, PA; Alan M. Sandals, Sandals & Associates, P.C., Philadelphia, PA; and Barry L. Gross, Stief, Gross, Sagoskin, Gilman & Classetti, P.C., Newtown, PA.

New York Life Insurance Company, headquartered in New York City, is the largest mutual life insurance company in the United States.

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Agreement Reached In Pension Lawsuit

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