FORM 11-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the Fiscal Year ended December 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ________________ to _________________
Commission file number 1-14642
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
ING 401(k) Plan for ILIAC Agents
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
ING Groep N.V.
Amstelveenseweg 500
1081 KL Amsterdam
The Netherlands
or
P.O. Box 810
1000 AV Amsterdam
The Netherlands
ING 401(k) Plan for ILIAC Agents
Contents of Audited Financial Statements and Supplemental Schedule
I. The following financial statements and supplemental schedule for the ING
401(k) Plan for ILIAC Agents are being filed herewith:
Financial Statements and Supplemental Schedule
December 31, 2003 and 2002, and the year ended December 31, 2003:
Report of Independent Registered Public Accounting Firm
Audited Financial Statements:
Statements of Net Assets Available for Benefits as of:
December 31, 2003
December 31, 2002
Statements of Changes in Net Assets Available for Benefits for the
years ended:
December 31, 2003
December 31, 2002
Notes to Financial Statements
Supplemental Schedule:
Schedule H, Line 4(i) - Schedule of Assets (Held at End of Year)
Signature Page
II. The following exhibits are being filed herewith:
Exhibit No. Description
1 Consent of Independent Registered Public
Accounting Firm - Ernst & Young LLP
99.1 Certification Pursuant to 18 U.S.C. Section 1350
(Section 906 of the Sarbanes-Oxley Act of 2002)
Report of Independent Registered Public Accounting Firm
Board of Directors
ING 401(k) Plan for ILIAC Agents
We have audited the accompanying statements of net assets available for benefits
of the ING 401(k) Plan for ILIAC Agents as of December 31, 2003 and 2002, and
the related statements of changes in net assets available for benefits for the
years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2003 and 2002, and changes in its net assets available for benefits
for the years then ended in conformity with U.S. generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of December 31, 2003, is presented for the purpose of
additional analysis and is not a required part of the financial statements but
is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
Atlanta, Georgia
June 21, 2004
1
ING 401(k) Plan for ILIAC Agents
Statements of Net Assets Available for Benefits
As of December 31, 2003 and 2002
2003 2002
--------------------- ---------------------
Assets
Investments, at fair value:
Mutual funds $ 16,908,665 $ 11,588,519
Common stock 293,854 95,674
Participant loans 910,558 527,257
Group annuity contract at contract value 2,494,514 1,541,122
--------------------- ---------------------
Net assets available for benefits $ 20,607,591 $ 13,752,572
===================== =====================
The accompanying notes are an integral part of these financial statements.
2
ING 401(k) Plan for ILIAC Agents
Statements of Changes in Net Assets Available for Benefits
For the years ended December 31, 2003 and 2002
2003 2002
--------------------- ---------------------
Additions:
Interest and dividends $ 236,018 $ 144,147
Contributions - participants 3,112,652 3,057,481
Contributions - employer 1,030,701 1,014,903
Net appreciation in fair value of investments 3,917,219 -
--------------------- ---------------------
Total additions 8,296,590 4,216,531
--------------------- ---------------------
Deductions:
Net depreciation in fair value of investments - 3,457,236
Benefits paid to participants 1,436,322 573,304
Administrative expenses 5,249 5,210
--------------------- ---------------------
Total deductions 1,441,571 4,035,750
--------------------- ---------------------
Net increase 6,855,019 180,781
Net assets available for benefits:
Beginning of year 13,752,572 13,571,791
--------------------- ---------------------
End of year $ 20,607,591 $ 13,752,572
===================== =====================
The accompanying notes are an integral part of these financial statements.
3
ING 401(k) Plan for ILIAC Agents
Notes to Financial Statements
--------------------------------------------------------------------------------
1. Description of Plan
General
The following description of the ING 401(k) Plan for ING Life Insurance and
Annuity Company ("ILIAC") Agents, formerly the Agents of Aetna Life
Insurance and Annuity Company Incentive Savings Plan, (the "Plan") provides
only general information. Participants should refer to the Summary Plan
Description for a more complete description of the Plan's provisions,
including those described herein.
The Plan is a voluntary defined contribution plan available to all
full-time insurance salesmen who, as defined in the Plan document, have
entered into a Career Agent Agreement with ILIAC. The Plan is intended to
meet the requirements of Internal Revenue Code ("IRC") Section 401(a). The
Plan contains a salary reduction feature intended to meet the requirements
applicable to cash or deferred arrangements under Section 401(k) of the
IRC. The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA").
ILIAC is the Plan sponsor ("Plan Sponsor") and the ING U.S. Pension
Committee is the plan administrator ("Plan Administrator"). Effective
January 2002, ING National Trust became the trustee ("Trustee") of the
Plan.
Investment Options
At December 31, 2003, the Plan's assets were invested in the following
investment vehicles: ING Fixed Account, ING GNMA Income Fund, ING
Intermediate Bond Fund, Fidelity Puritan Fund, Merrill Lynch Equity Index
Trust, Fidelity Blue Chip Growth Fund, ING Growth Fund, ING LargeCap Growth
Fund, ING Value Opportunity Fund, MFS Capital Opportunities Fund, AIM Small
Cap Growth Fund, ING Index Plus MidCap Fund, ING Index Plus LargeCap Fund,
ING Small Company Fund, ING SmallCap Opportunities Fund, ING Technology
Fund, ING International Fund, ING International Value Fund, Janus Worldwide
Fund and ING Market Stock Fund.
Concentrations of Risk
At December 2003 and 2002, the Plan's assets were significantly
concentrated in ING mutual funds and shares of Company stock (as more fully
described below), the value of which is subject to fluctuations, related to
corporate, industry and economic factors.
Eligibility
All employees meeting the qualifying requirements, as specified in the Plan
documents, are immediately eligible to participate in the Plan. Generally,
Plan participation is limited to Career Agents, as defined in the Plan
documents.
4
ING 401(k) Plan for ILIAC Agents
Notes to Financial Statements
--------------------------------------------------------------------------------
Participant Accounts
Each participant's account is credited with the participant's contribution
and the Company's contribution. Company contributions are based on
participant deferrals and eligible earnings. Each participant's account is
also credited with allocations of Plan investment results. All earnings,
with respect to participant's accounts, are allocated to each participant's
account as soon as practicable after they accrue or arise. The benefit to
which a participant is entitled is the benefit that can be provided from
the participant's vested account.
Vesting
Participants are immediately vested in their contributions plus actual
earnings thereon. Participants who enter into a Career Agent contract with
ILIAC will vest in ILIAC matching contributions over four years of service
at the rate of 25% after the first year, 50% after the second year, 75%
after the third year, and 100% after the fourth year. Participants who
entered into a Career Agent contract with ILIAC prior to January 1, 2002
will vest in ILIAC matching contributions over three years of service at a
rate of 50% after the first year, 75% after the second year and 100% after
the third year. Employees are immediately fully vested when any of the
following occur: (1) obtaining age 65 while actively employed, (2) dying
while actively employed, (3) obtaining eligibility for benefits under ING's
managed long term disability plan, or (4) termination or partial
termination of the Plan.
The amount of cumulative forfeited nonvested participant accounts as of
December 31, 2003 and 2002 is $40,981 and $25,908, respectively.
Employee Contributions
Participants may contribute up to 20% of their pre-tax eligible earnings
for the Plan year. Participants may also contribute eligible amounts
representing distributions from other qualified plans in a tax-free
rollover ("rollover"). Participant contributions, other than rollovers, are
subject to limitations imposed by the IRC.
Employer Contributions
ILIAC matches participants' pre-tax contributions at 50% of each
participant's contributions up to the first 6% of total eligible earnings.
The IRC limits can affect certain highly paid participants' eligibility to
receive matching contributions.
5
ING 401(k) Plan for ILIAC Agents
Notes to Financial Statements
--------------------------------------------------------------------------------
Participant Loans
Subject to the provisions of the Plan, participants may borrow against
their account balances provided that the amount requested is at least
$1,000 but not more than the lesser of 50% of the vested balance or
$50,000.
Each loan will bear an interest rate as prescribed by the Plan's applicable
provisions, currently the prime interest rate plus 1%. Loan repayment
periods are for a maximum of five years. Principal and interest are repaid
ratably through commission check deductions.
Benefits
Upon termination of service due to death, disability or retirement, a
participant or his/her beneficiary may elect to receive either a lump-sum
distribution or periodic payments of the vested account balances. A
participant may elect to receive his or her benefit in Company (defined as
American Depository Shares of ING Groep, N.V., a Netherlands Corporation
which is the parent company of the Plan Sponsor) stock to the extent his or
her account is invested in Company stock. As defined in the Plan documents,
certain participants are also eligible for hardship withdrawals, consistent
with the provisions of the IRC.
Administrative Expenses
The Plan is responsible for paying all Plan expenses unless the Company
determines to pay them.
Plan Termination
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants will become 100% vested in their Plan accounts.
2. Summary of Significant Accounting Policies
Basis of Accounting
The accompanying financial statements have been prepared using the accrual
basis of accounting.
6
ING 401(k) Plan for ILIAC Agents
Notes to Financial Statements
--------------------------------------------------------------------------------
Investment Valuation and Income Recognition
The Plan provides for investments in ING American Depository Shares,
guaranteed investment contracts ("GICs"), and mutual funds. Investment
securities, in general, are exposed to various risks, such as interest
rate, credit, and overall market volatility risks. Due to the level of risk
associated with certain investment securities, it is reasonably possible
that changes in values of investment securities will occur in the near
term; such changes could materially affect the amounts reported in the
statements of net assets available for benefits.
Mutual funds are stated at fair value, which is the quoted market price.
Investments in ING American Depository Shares are based on the quoted
market price of the common shares of ING Groep, N.V. Certain investments in
contracts with insurance companies (ING Fixed Account) are stated at
contract value, in accordance with American Institute of Certified Public
Accountants ("AICPA") Statement of Position 94-4 Reporting of Investment
Contracts Held by Health and Welfare Benefit Plans and Defined Contribution
Pension Plans ("SOP 94-4"), which approximates fair value.
Loans to participants are valued at their outstanding balances, which
approximate fair value.
Interest income is recorded on the accrual basis of accounting. Dividends
are recorded on the ex-dividend date. Purchases and sales of securities are
recorded on the trade date.
Use of Estimates
The preparation of the financial statements in conformity with U.S.
generally accepted accounting principles requires the Plan Administrator to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ
from those estimates.
Risks and Uncertainties
The Plan invests in various investment securities. Investment securities
are exposed to various risks, such as interest rate, market and credit
risks. Due to the level of risk associated with certain investment
securities, it is at least reasonably possible that changes in the value of
investment securities will occur in the near term and that such changes
could materially affect participants' account balances and the amounts
reported in the statements of net assets available for benefits.
7
ING 401(k) Plan for ILIAC Agents
Notes to Financial Statements
--------------------------------------------------------------------------------
3. Income Tax Status
The Plan received a determination letter from the Internal Revenue Service
dated March 27, 2003, stating that the Plan is qualified under Section
401(a) of the IRC and, therefore, the related trust is exempt from
taxation. Once qualified, the Plan is required to operate in conformity
with the IRC to maintain its qualification. The Plan Administrator believes
that the Plan is being operated in compliance with the applicable
requirements of the IRC and, therefore, believes the Plan is qualified and
the related trust is tax exempt.
The Plan was amended and restated effective January 1, 2002, to incorporate
the applicable requirements of the Uruguay Round Agreements Act ("GAAT"),
Uniformed Services Employment and Reemployment Rights Act of 1994, Small
Business Job Protection Act of 1996, the Taxpayer Relief Act of 1997, the
Internal Revenue Service Restructuring and Reform Act of 1998 and the
Community Renewal Tax Relief Act of 2000.
4. Investments
The following individual investments represent 5% or more of the Plan's
total net assets as of the years ended December 31:
2003 2002
---------------------- --------------------
ING Small Company Fund - Class I $ 3,407,863 $ 2,496,094
ING Fixed Account 2,494,515 1,541,122
Fidelity Blue Chip Growth Fund 2,650,206 1,987,272
ING Growth Fund - Class I 2,099,963 1,624,859
MFS Capital Opportunities Fund - Class A N/A 745,732
ING International Value Fund - Class I 2,060,102 1,171,579
ING Index Plus MidCap Fund - Class I 1,200,372 N/A
ING Index Plus LargeCap Fund 1,109,705 N/A
The net appreciation (depreciation) in fair value of each significant class
of investments, which consists of the realized gains of losses and the
unrealized appreciation (depreciation) on those investments, is as follows
for the years ended December 31:
2003 2002
---------------------- --------------------
Mutual funds $ 3,850,220 $ (3,423,356)
ING Company shares 66,999 (33,880)
---------------------- --------------------
Net appreciation (depreciation) in fair value $ 3,917,219 $ (3,457,236)
====================== ====================
8
ING 401(k) Plan for ILIAC Agents
Notes to Financial Statements
--------------------------------------------------------------------------------
5. Investment in Insurance Contracts
As of December 31, 2003, the Plan maintained one GIC related investment
option, the ING Fixed Account. This contract is considered to be fully
benefit responsive in accordance with AICPA SOP 94-4 and is carried at
contract value. As of December 31, 2003 and 2002, the fair value of the
investment in the ING Fixed Account approximates contract value of
$2,494,514.
The average yields for the contract for the years ended December 31, 2003
and 2002 were 4.52% and 5.25%, respectively. The crediting interest rates
for the contract as of December 31, 2003 and 2002 were 4.45% and 5.25%,
respectively. The minimum crediting interest rates for the contract for the
years ended December 31, 2003 and 2002 were 4.45% and 4.95%, respectively.
The underlying contract has no restrictions on the use of Plan assets and
there are no valuation reserves recorded to adjust contract amounts.
6. Blackout Period
During 2002, as part of the transfer to a new trustee, the Plan Sponsor
initiated blackout period restrictions with respect to participant
activity. Certain investment options were changed and new ones made
available to participants.
All contributions for 2002 were directed to the new Trustee. Effective
February 15, 2002, the blackout period ended and full-service activity
resumed on all participant accounts.
7. Parties-in-Interest to the Plan
The Plan holds investments in several mutual funds that are managed by
affiliated companies of the Plan Sponsor. These funds are considered
parties-in-interest (as defined in ERISA) to the Plan. At December 31, 2003
and 2002, funds of $14,295,779 and $9,354,919 were held in such investments
and are considered parties-in-interest to the Plan.
9
Supplemental Schedule
ING 401(k) Plan for ILIAC Agents
EIN-71-0294708 Plan-005
Schedule H, Line 4(i)
Schedule of Assets (Held at End of Year)
At December 31, 2003
--------------------------------------------------------------------------------
(a) (b) (c) (e)
Identity of Issuer,
Borrower, Lessor or Description of Investment Including Maturity Date, Rate of
Similar Party Interest, Collateral, Par or Maturity Value Current Value
------- ------------------------ ----------------------------------------------------------------- ------------------
* ING Fixed Account Investments underlying the ING Fixed Account are managed with $ 2,494,514
a goal of producing the highest sustainable credited interest
rates. An emphasis on high-credit, mortgage backed securities,
and careful monitoring of the portfolio's risk to changes in
interest rates are key strategies for maintaining competitive
rates. The fixed account credited rate is 3.65% in 2003.
* ING GNMA Income Fund This separate account seeks a high level of current income, 155,895
consistent with liquidity and safety of principal, through
investment primarily in mortgage-backed GNMA certificates that
are guaranteed as to the timely payment of principal and
interest by the United States Government. 17,635 units at $8.84
per unit.
* ING Intermediate Bond This separate account seeks to provide investors with a high 353,712
Fund level of current income, consistent with the preservation of
capital and liquidity. 33,687 units at $10.50 per unit.
Fidelity Puritan Fund This separate account seeks income and capital growth 567,033
consistent with reasonable risk. 30,700 units at $18.47 per unit.
Merrill Lynch Equity This separate account seeks to provide investment results that, 617,594
Index Trust before expenses, replicate the total return of the Standard &
Poor's 500 Composite Stock Price Index. 7,442 units at $82.99
per unit.
Fidelity Blue Chip This separate account seeks growth of capital over the long 2,650,206
Growth Fund term. 66,874 units at $39.63 per unit.
* ING Growth Fund - This separate account seeks growth of capital through 2,099,963
Class I investment in a diversified portfolio consisting primarily of
common stocks and securities convertible into common stocks
believed to offer growth potential. 177,063 units at $11.86 per
unit.
* ING LargeCap Growth This separate account seeks long-term capital appreciation. 210,473
Fund - Class I 12,089 units at $17.41 per unit.
* ING Value Opportunity This separate account seeks growth of capital primarily through 556,240
Fund Class I investment in a diversified portfolio of common stocks and
securities convertible into common stock. 55,791units at $9.97
per unit.
MFS Capital This separate account seeks capital appreciation. 64,342 units 773,396
Opportunities Fund - at $12.02 per unit.
Class A
11
ING 401(k) Plan for ILIAC Agents
EIN-71-0294708 Plan-005
Schedule H, Line 4(i)
Schedule of Assets (Held at End of Year)
At December 31, 2003
--------------------------------------------------------------------------------
(a) (b) (c) (e)
Identity of Issuer,
Borrower, Lessor or Description of Investment Including Maturity Date, Rate of
Similar Party Interest, Collateral, Par or Maturity Value Current Value
------- ------------------------ ----------------------------------------------------------------- ------------------
AIM Small Cap Growth This separate account seeks long-term growth of capital. 16,719 429,835
Fund - Class R units at $25.71 per unit.
* ING Index Plus MidCap This separate account seeks to outperform the total return 1,200,372
Fund - Class I performance of the Standard & Poor's MidCap 400 Index while
maintaining a market level of risk. 85,497 units at $14.04 per
unit.
* ING Index Plus This separate account seeks to outperform the total return 1,109,705
LargeCap Fund (I) performance of the Standard & Poor's 500 Composite Index while
maintaining a market level of risk. 78,369 units at $14.16 per
unit.
* ING Small Company This separate account seeks growth of capital primarily through 3,407,863
Fund - Class I investment in a diversified portfolio of common stocks and
securities convertible into common stocks of companies with
smaller market capitalization. 217,894 units at $15.64 per unit.
* ING SmallCap This separate account seeks capital appreciation. 4,754 units 110,665
Opportunities Fund - at $23.28 per unit.
Class A
* ING Technology This separate account seeks long-term capital appreciation. 493,043
Fund - Class I 127,401 units at $3.87 per unit.
* ING International Fund This separate account seeks long-term growth of capital. 4,724 43,231
- Class I units at $9.15 per unit.
* ING International This separate account seeks long-term capital appreciation. 2,060,102
Value Fund - Class I 136,340 units at $15.11 per unit.
Janus Worldwide Fund This separate account seeks long-term growth of capital in a 69,337
manner consistent with the preservation of capital. 1,754 units
at $39.54 per unit.
ING Market Stock This separate account seeks to invest primarily in ING American 293,854
Fund Depository Shares ("ING ADS").
Participant loans 910,558
------------------
$ 20,607,591
==================
Note: Column (d) cost information is omitted for all participant
directed investments.
* Indicates a party-in-interest to the Plan.
12
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
ING 401(k) Plan for ILIAC Agents
Dated: June 21, 2004 By: ING US PENSION COMMITTEE
By:/s/ Darryl Harris
---------------------------------
Name: Darryl Harris
Title: Chairman
Exhibit 1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-14254) pertaining to the ING 401(k) Plan for ILIAC Agents of ING
Groep N.V. and affiliates of our report dated June 21, 2004, with respect to the
financial statements and schedule of the ING 401(k) Plan for ILIAC Agents
included in this Annual Report (Form 11-K) for the year ended December 31, 2003.
Atlanta, Georgia /s/ Ernst & Young LLP
June 21, 2004
Exhibit 99.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)
In connection with the Annual Report on Form 11-K of the ING 401(k) Plan for
ILIAC Agents (the "Plan") for the year ended December 31, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), the
undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of
such officer's knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Plan.
Date: June 21, 2004
By: /s/ B. Scott Burton
--------------------------------
Name: B. Scott Burton
Title: Attorney in Fact
The foregoing certification is being furnished solely pursuant to 18 U.S.C.
Section 1350 and is not being filed as part of the Report or as a separate
disclosure document. This certification shall not be deemed "filed" for purposes
of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to
liability under that section. This certification shall not be deemed to be
incorporated by reference into any filing under the Securities Act of 1933 or
the Securities Exchange Act of 1934 except to the extent that this Exhibit 99.1
is expressly and specifically incorporated by reference in any such filing.
A signed original of this written statement required by Section 906 has been
provided to the Plan and will be retained by the Plan and furnished to the
Securities and Exchange Commission or its staff upon request.