ING STRATEGIC ALLOCATIONS PORTFOLIOS, INC.

N-CSR 1 dncsr.htm ING STRATEGIC ALLOCATIONS PORTFOLIOS, INC. ING STRATEGIC ALLOCATIONS PORTFOLIOS, INC.


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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF

REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-8934

ING Strategic Allocation Portfolios, Inc.

(Exact name of registrant as specified in charter)


7337 E. Doubletree Ranch Rd., Scottsdale, AZ		85258
(Address of principal executive offices)		(Zip code)

The Corporation Trust Incorporated, 300 E. Lombard Street, Baltimore, MD 21201

(Name and address of agent for service)

Registrant’s telephone number, including area code: 1-800-992-0180

Date of fiscal year end: December 31

Date of reporting period: January 1, 2009 to December 31, 2009

Item 1.

Reports to Stockholders.

The following is a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Act (17 CFR 270.30e-1):

LOGO

Annual Report

December 31, 2009

Classes ADV, I and S

Strategic Allocation Funds-of-Funds

n	ING Strategic Allocation Conservative Portfolio

n	ING Strategic Allocation Growth Portfolio

n	ING Strategic Allocation Moderate Portfolio


		E-Delivery Sign-up – details inside

This report is submitted for general information to shareholders of the ING Funds. It is not authorized for distribution to prospective shareholders unless accompanied or preceded by a prospectus which includes details regarding the funds’ investment objectives, risks, charges, expenses and other information. This information should be read carefully.

MUTUAL FUNDS

LOGO

TABLE OF CONTENTS


President’s Letter		1

Market Perspective		2

Portfolio Managers’ Reports		4

Shareholder Expense Examples		10

Report of Independent Registered Public Accounting Firm		11

Statements of Assets and Liabilities		12

Statements of Operations		13

Statements of Changes in Net Assets		14

Financial Highlights		16

Notes to Financial Statements		18

Portfolios of Investments		25

Tax Information		28

Director and Officer Information		29

Advisory Contract Approval Discussion		33



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PROXY VOTING INFORMATION

A description of the policies and procedures that the Portfolios use to determine how to vote proxies related to portfolio securities is available: (1) without charge, upon request, by calling Shareholder Services toll-free at (800) 992-0180; (2) on the ING Funds’ website at www.ingfunds.com; and (3) on the U.S. Securities and Exchange Commission’s (“SEC”) website at www.sec.gov. Information regarding how the Portfolios voted proxies related to portfolio securities during the most recent 12-month period ended June 30 is available without charge on the ING Funds’ website at www.ingfunds.com and on the SEC’s website at www.sec.gov.

QUARTERLY PORTFOLIO HOLDINGS

The Portfolios file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Portfolios’ Forms N-Q are available on the SEC’s website at www.sec.gov. The Portfolios’ Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330; and is available upon request from the Portfolios by calling Shareholder Services toll-free at (800) 992-0180.

PRESIDENT’S LETTER

LOGO

Dear Shareholder,

It would be hard to find fault with the returns of securities markets over the past year, but we have been through a tumultuous period, and recent events raise new questions. By most measures (with the confounding exception of employment) the global recession is abating and economies are growing again, especially in the developing countries of Asia. Every silver lining has a cloud, though, and the improved but fragile outlook carries within it the same risks that got us into this crisis: disengaged monetary policies, unpredictable asset bubbles, enfeebled regulation and wilting political will.

Against the backdrop of the Davos World Economic Forum and President Obama’s first State of the Union address, Ben Bernanke, Chairman of the Federal Reserve, was confirmed by the Senate for a second four-year term, adding some element of certainty to the concerns of investors about the future. He and other policymakers still

face economic problems, such as our growing long-term budget deficit, which will influence markets going forward.

How can this information help you with your investment plans? The outlook for corporate profits and market valuations is driven, at least in part, by reactions of government officials to economic and political events. The federal budget deficit casts overtones of uncertainty around expectations for inflation, for example, which could affect the value of all assets in U.S. markets. As a result, it could make sense to broaden one’s investment horizons to include additional exposure to non-U.S. investments.

The strong returns of the stock markets last year should not obscure the fact that keeping a well-diversified asset mix is likely to serve your financial needs. Before you make any changes to your portfolio, discuss them thoroughly with your investment advisor to ensure they appropriately reflect your situation.

Thank you for your continued confidence in ING Funds. We look forward to serving your investment needs in the future.

Sincerely,

LOGO

Shaun Mathews

President & Chief Executive Officer

ING Funds

January 28, 2010

The views expressed in the President’s Letter reflect those of the President as of the date of the letter. Any such views are subject to change at any time based upon market or other conditions and ING Funds disclaim any responsibility to update such views. These views may not be relied on as investment advice and because investment decisions for an ING Fund are based on numerous factors, may not be relied on as an indication of investment intent on behalf of any ING Fund. Reference to specific company securities should not be construed as recommendations or investment advice. Consider the fund’s investment objectives, risks, and charges and expenses carefully before investing. The prospectus contains this information and other information about the fund.

International investing poses special risks including currency fluctuation, economic and political risks not found in investments that are solely domestic.

MARKET PERSPECTIVE: YEAR ENDED DECEMBER 31, 2009

In our semi-annual report we described how markets in risky assets, depressed by the financial crisis and recession, had abruptly recovered after early March to register gains through June 30, 2009. This was maintained in the second half of the fiscal year and global equities in the form of the MSCI World Index^SM⁽¹⁾ measured in local currencies, including net reinvested dividends (“MSCI” for regions discussed below), added 20.00%, for a return of 25.70% for the fiscal year ended December 31, 2009. (The MSCI World Index^SM returned 29.99% for the fiscal year ended December 31, 2009, measured in U.S. dollars). From the March 9, 2009 low point, the return was 60.90%. In currencies, the U.S. dollar was mixed for the year, losing 1.60% to the euro and 9.10% to the pound, but gaining 2.10% on the yen.

The rally had been credited to “green shoots”, a metaphor for signs, perhaps frail and erratic, that the worst of the financial crisis and resulting recession was over. Governments intervened massively to recapitalize companies considered systemically important, or at least to make practically unlimited amounts of liquidity available to them at low cost. These were mainly banks and other financial institutions, but in the U.S. also included major auto makers. Some financial giants in the U.S. and U.K., once thought impregnable, now sit meekly under government control. Interest rates have been reduced to record low levels to encourage these institutions to lend and generally to support demand. Bank lending has continued to stagnate, however (except in China, where banks tend to follow government directions). Corporations have instead issued bonds, which have been eagerly taken up by yield hungry investors.

“Cash-for-Clunkers” programs were successfully introduced in a number of countries, under which governments subsidized the trade-in of old vehicles for newer models. In the U.S., the government offered an $8,000 tax credit to first-time home buyers and extended jobless benefits. In Europe, to reduce the number of workers being laid off, corporations were subsidized to keep them on part time. The UK reduced Value Added Tax.

Government budget deficits have soared to modern-day records: in the U.S. alone, the deficit equaled $1.42 trillion for the fiscal year ending September 30, 2009. To keep interest rates down, the Federal Reserve Board and the Bank of England have been buying Treasury bonds in a strategy known as quantitative easing.

What will happen when large-scale government intervention ends is probably the greatest concern for investors. But China’s rate of gross domestic product (“GDP”) growth is approaching 10% again and by the end of the year some key areas of the domestic economy were clearly looking better.

House prices are rising again. The Standard & Poor’s (“S&P”)/Case-Shiller National U.S. Home Price Index⁽²⁾ of house prices in 20 cities was reported in December to have risen for five consecutive months, although it was still down 7.30% from a year earlier. Sales of existing homes in November rose to the highest levels since February 2007.

On the employment front, just 11,000 jobs were lost in November and by year end the number of new unemployment claims was the lowest since July 2008. Yet the unemployment rate rose to 10.00%, having peaked at 10.20% even as thousands of workers left the labor force. Wage growth continued to decelerate and the average working week still hovered near lowest recorded levels. Broad, sustainable recovery will require a much more vigorous improvement in the labor market.

The economy, after four consecutive quarterly declines, has at least started to expand again. In the third quarter of 2009, GDP in the U.S. rose by 2.20% at an annual rate.

In U.S. fixed income markets, the Barclays Capital U.S. Aggregate Bond Index ⁽³⁾ of investment grade bonds returned 5.93% for the fiscal year ended December 31, 2009. But improving risk appetite, combined with concern over the large volumes of issuance and fears of longer term inflation, meant that the Barclays Capital U.S. Treasury Index⁽⁴⁾ component returned (3.57)% while the Barclays Capital Corporate Investment Grade Bond Index⁽⁵⁾ returned 18.68%. High yield bonds, represented by the Barclays Capital High Yield Bond—2% Issuer Constrained Composite Index⁽⁶⁾, did even better, gaining a remarkable 58.76%. The annual yield on the 90-day U.S. Treasury Bills started the year at 12 basis points and ended it at just 5 basis points.

U.S. equities, represented by the S&P 500^® Composite Stock Price (“S&P 500^®”) Index⁽⁷⁾ including dividends, returned 26.46% for the fiscal year ended December 31, 2009, led by the technology and materials sectors, with telecoms and utilities lagging, albeit with positive returns. It was far from a smooth ride, and sentiment would periodically become fixated on the rather shaky foundation of the rally. Profits for

MARKET PERSPECTIVE: YEAR ENDED DECEMBER 31, 2009

S&P 500^® companies suffered their ninth straight quarter of annual decline in the third quarter. But this must surely change in the fourth quarter since in the corresponding period in 2008, S&P 500^® earnings were actually negative.

In international markets, the MSCI Japan^® Index⁽⁸⁾ rose 9.10% for the fiscal year, all of it in the first half. By the second quarter, GDP was rising again but it was due to net exports and government stimulus. Domestic demand was still in the doldrums, with wages down for 18 straight months and deflation again the norm. The MSCI Europe ex UK^® Index⁽⁹⁾ surged 27.70%. As in the U.S., the region’s economy returned to growth in the third quarter of 2009. Prices stopped falling in November and by year end purchasing managers’ indices were in expansion mode. Against this, unemployment was still on the rise to 9.80%. The MSCI UK^® Index⁽¹⁰⁾ jumped 27.60%, despite the disappointment that, alone among the world’s largest economies, a rebound in GDP had not been reported by year end. Still, by November house prices were rising on an annual basis for the first time since early 2008, unemployment stabilized and, as in Continental Europe, purchasing managers’ indices pointed firmly to expansion.

⁽¹⁾ The MSCI World Index^SM is an unmanaged index that measures the performance of over 1,400 securities listed on exchanges in the U.S., Europe, Canada, Australia, New Zealand and the Far East.

⁽²⁾ The S&P/Case-Shiller National U.S. Home Price Index tracks the value of single-family housing within the United States. The index is a composite of single family home price indices for the nine U.S. Census divisions and is calculated quarterly.

⁽³⁾ The Barclays Capital U.S. Aggregate Bond Index is an unmanaged index of publicly issued investment grade U.S. Government, mortgage-backed, asset-backed and corporate debt securities.

⁽⁴⁾ The Barclays Capital U.S. Treasury Index is an unmanaged index that includes public obligations of the U.S. Treasury. Treasury bills, certain special issues, such as state and local government series bonds (SLGs), as well as U.S. Treasury TIPS and STRIPS, are excluded.

⁽⁵⁾ The Barclays Capital Corporate Investment Grade Bond Index is the corporate component of the

Barclays Capital U.S. Credit Index. The U.S. Credit Index includes publicly-issued U.S. corporate and specified foreign debentures and secured notes that meet the specified maturity, liquidity, and quality requirements. The index includes both corporate and non-corporate sectors. The corporate sectors are industrial, utility and finance, which includes both U.S. and non-U.S. corporations.

⁽⁶⁾ The Barclays Capital High Yield Bond—2% Issuer Constrained Composite Index is an unmanaged index that includes all fixed income securities having a maximum quality rating of Ba1, a minimum amount outstanding of $150 million, and at least one year to maturity.

⁽⁷⁾ The S&P 500^® Index is an unmanaged index that measures the performance of securities of approximately 500 large-capitalization companies whose securities are traded on major U.S. stock markets.

⁽⁸⁾ The MSCI Japan^® Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance in Japan.

⁽⁹⁾ The MSCI Europe ex UK^® Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance in Europe, excluding the UK.

⁽¹⁰⁾ The MSCI UK^® Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance in the UK.

Parentheses denote a negative number.

All indices are unmanaged and investors cannot invest directly in an index. Past performance does not guarantee future results. The performance quoted represents past performance. Investment return and principal value of an investment will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. The Portfolios’ performance is subject to change since the period’s end and may be lower or higher than the performance data shown. Please call (800) 992-0180 or log on to www.ingfunds.com to obtain performance data current to the most recent month end.

Market Perspective reflects the views of ING’s Chief Investment Risk Officer only through the end of the period, and is subject to change based on market and other conditions.


PORTFOLIO MANAGERS’ REPORT		ING STRATEGIC ALLOCATION PORTFOLIOS

ING Strategic Allocation Conservative Portfolio seeks to provide total return (i.e., income and capital growth, both realized and unrealized) consistent with preservation of capital. ING Strategic Allocation Growth Portfolio seeks to provide capital appreciation. ING Strategic Allocation Moderate Portfolio seeks to provide total return (i.e., income and capital appreciation, both realized and unrealized). ING Strategic Allocation Conservative Portfolio, ING Strategic Allocation Growth Portfolio and ING Strategic Allocation Moderate Portfolio (each a “Portfolio” and collectively, the “Portfolios”) are managed by Paul Zemsky and Heather Hackett, Portfolio Managers of ING Investment Management Co. — the Sub-Adviser.

Performance: For the year ended December 31, 2009, ING Strategic Allocation Conservative Portfolio’s Class I shares provided a total return of 18.00% compared to the Barclays Capital U.S. Aggregate Bond Index⁽¹⁾ and the Strategic Allocation Conservative Composite Index⁽²⁾, which returned 5.93% and 15.75%, respectively, for the same period. For the year ended December 31, 2009, ING Strategic Allocation Growth Portfolio’s Class I shares provided a total return of 25.37% compared to the Russell 3000^® Index⁽¹⁾ and the ING Strategic Allocation Growth Composite Index⁽²⁾ (“Composite Index”), which returned 28.34% and 26.15%, respectively, for the same period. For the year ended December 31, 2009, ING Strategic Allocation Moderate Portfolio’s Class I shares provided a total return of 21.84% compared to the Russell 3000^® Index⁽¹⁾ and the ING Strategic Allocation Moderate Composite Index⁽²⁾ (“Composite Index”), which returned 28.34% and 21.04%, respectively, for the same period.

Portfolio Specifics: As the reporting period began, the financial world was on the brink of collapse after the failure of Lehman Brothers. Credit markets froze and the housing market cratered; global bond and stock markets suffered some of the worst performance since the crash of 1987. Bank failures escalated and central banks across the world provided unprecedented policy action in the form of massive fiscal and monetary stimulus. This gloomy picture brightened in March, however, when Citibank announced a return to profitability. A rally ensued; equity markets rewarded investors with positive performance, and the year finished on a strong note.

The Portfolios remained at strategic allocation weights and thus allocation results were flat. All asset classes demonstrated positive

absolute returns. On a relative basis, our bond exposure was the largest contributor to outperformance.

The underlying fund (each an “Underlying Fund” and collectively, the “Underlying Funds”) making the largest positive contribution relative to the composite indices was in the fixed income asset class. ING Intermediate Bond Portfolio’s significant outperformance compared to its sub-benchmark, the Barclays Capital U.S. Aggregate Bond Index, rebounded smartly this year on the heels of non-agency residential mortgage-backed securities, an overweight to investment grade credit and allocations to emerging market debt and high yield. Allocations to lower-rated investment grade corporate bonds, especially in the financial sector, were also helpful. On the equity side, ING Tactical Asset Allocation Fund (“TAAF”) outperformed the S&P 500^® Index as its overlay strategy benefited returns. Country selection contributed to TAAF’s results, particularly through its average long equities exposure.

Conversely, ING Index Plus LargeCap Portfolio and ING Index Plus MidCap Portfolio underperformed their respective sub-benchmarks, the S&P 500^® and S&P Midcap indices, for the period. Both Underlying Funds’ main drivers of underperformance were their market recognition factors, including price momentum and analyst estimate revisions. This underperformance was most severe in March and April and again in July and August. Quality factors also detracted from performance during the first three quarters of 2009. Free cash flow to net income was an exception among the quality factors in that it performed well. Valuation factors worked well during the year, particularly deep value factors including price to book and price to cash.

As we strove to improve the performance of the Portfolios, we made some changes in August 2009 (see the tables below). We slightly modified the strategic weights of the Portfolios and added actively managed funds to the mix. Moreover, ING Growth and Income Portfolio, ING MidCap Opportunities Portfolio, ING Small Company Portfolio and ING Global Real Estate Portfolio were added to the large-cap, mid-cap, small-cap and real estate asset classes, respectively. During the period, ING Index Plus International Equity Portfolio was merged into the ING International Index Portfolio. In the last four months of 2009, ING Growth and Income Portfolio and ING Small Company Portfolio underperformed, and ING Global Real Estate Portfolio and ING MidCap Opportunities Portfolio outperformed their individual benchmarks. The Portfolios are actively managed and may deviate from their strategic weights.



Strategic Allocation Conservative Composite Index
Asset Class	Before August 2009		After August 2009
S&P 500^® Index	18	%	20	%
S&P MidCap 400 Index	3	%	4	%
S&P SmallCap 600 Index	3	%	4	%
MSCI EAFE Index	11	%	13	%
DJ Wilshire Real Estate Securities Index	10	%	4	%
Barclays Capital U.S. Aggregate Bond Index	50	%	50	%
30-Day U.S. T-Bill	5	%	5	%

	100	%	100	%


PORTFOLIO MANAGERS’ REPORT		ING STRATEGIC ALLOCATION PORTFOLIOS



Strategic Allocation Growth Composite Index
Asset Class	Before August 2009		After August 2009
S&P 500^® Index	36	%	37	%
S&P MidCap 400 Index	9	%	9	%
S&P SmallCap 600 Index	9	%	9	%
MSCI EAFE Index	25	%	25	%
DJ Wilshire Real Estate Securities Index	6	%	5	%
Barclays Capital U.S. Aggregate Bond Index	13	%	13	%
30-Day U.S. T-Bill	2	%	2	%

	100	%	100	%



Strategic Allocation Moderate Composite Index
Asset Class	Before August 2009		After August 2009
S&P 500^® Index	27	%	28	%
S&P MidCap 400 Index	6	%	6	%
S&P SmallCap 600 Index	6	%	6	%
MSCI EAFE Index	18	%	20	%
DJ Wilshire Real Estate Securities Index	8	%	5	%
Barclays Capital U.S. Aggregate Bond Index	32	%	32	%
30-Day U.S. T-Bill	3	%	3	%

	100	%	100	%

Current Strategy and Outlook: As we close the chapter on another year, we are pleased with the progress and amazed at the stark differences in the overall environment compared with a mere 12 months ago. We believe economic depression worries have abated, stock markets around the world have rallied and signs of an early upswing are plentiful.

We remain cautiously optimistic, however, particularly regarding the outlook for the developed world as we forecast past mid-year. As growth from the inventory cycle and government stimulus fades, we will continue to confront issues that will ultimately shape the direction and magnitude of the recovery. Unemployment is the key driver of a sustained recovery; additionally, credit creation must provide the fuel for growth.

Asset Allocation

as of December 31, 2009

(as a percentage of net assets)


Affiliated Underlying Funds		ING Strategic Allocation Conservative Portfolio		ING Strategic Allocation Growth Portfolio		ING Strategic Allocation Moderate Portfolio
ING Clarion Global Real Estate Portfolio - Class I	%	4.1		5.1		5.1
ING Growth and Income Portfolio - Class I	%	9.9		21.9		12.9
ING Institutional Prime Money Market Fund - Class I	%	5.0		2.0		3.0
ING Intermediate Bond Portfolio - Class I	%	49.9		12.9		31.9
ING International Index Portfolio - Class I	%	13.1		25.2		20.2
ING MidCap Opportunities Portfolio - Class I	%	4.0		9.0		6.0
ING Small Company Portfolio - Class I	%	4.0		9.0		6.0
ING Tactical Asset Allocation Fund - Class I	%	10.0		14.9		14.9
Other assets and liabilities - Net	%	(0.0	)*	(0.0	)*	(0.0	)*

	%	100.0		100.0		100.0

*	Amount is more than (0.05)%

Portfolio holdings and characteristics are subject to change and may not be representative of current holdings and characteristics. The outlook for this Portfolio may differ from that presented for other ING Funds. Performance for the different classes of shares will vary based on differences in fees associated with each class.


PORTFOLIO MANAGERS’ REPORT		ING STRATEGIC ALLOCATION CONSERVATIVE PORTFOLIO

LOGO



Average Annual Total Returns for the Periods Ended December 31, 2009
	1 Year		5 Year		10 Year		Since Inception of Class ADV December 29, 2006		Since Inception of Class S August 5, 2005
Class ADV	18.04	%	—		—		(1.86	)%	—
Class I	18.00	%	1.41	%	2.56	%	—		—
Class S	17.79	%	—		—		—		0.84	%
Barclays Capital U.S. Aggregate Bond Index⁽¹⁾	5.93	%	4.97	%	6.33	%	6.04	%⁽³⁾	5.27	%⁽⁴⁾
Strategic Allocation Conservative Composite Index⁽²⁾	15.75	%	2.92	%	3.81	%	0.90	%⁽³⁾	2.74	%⁽⁴⁾

Based on a $10,000 initial investment, the graph and table above illustrate the total return of ING Strategic Allocation Conservative Portfolio against the indices indicated. An index is unmanaged and has no cash in its portfolio, imposes no sales charges and incurs no operating expenses. An investor cannot invest directly in an index. The Portfolio’s performance is shown without the imposition of any expenses or charges which are, or may be, imposed under your annuity contract. Total returns would have been lower if such expenses or charges were included.

The performance graph and table do not reflect the deduction of taxes that a shareholder will pay on Portfolio distributions or the redemption of Portfolio shares.

The performance shown may include the effect of fee waivers and/or expense reimbursements by the Investment Adviser and/or other service providers, which have the effect of increasing total return. Had all fees and expenses been considered, the total returns would have been lower.

The performance update illustrates performance for a variable investment option available through a variable annuity contract. The performance shown indicates past performance and is not a projection or prediction of future results. Actual investment returns and principal value will fluctuate so that shares and/or units, at redemption, may be worth more or less than their original cost. Please call (800) 992-0180 to get performance through the most recent month end.

This report contains statements that may be “forward-looking” statements. Actual results may differ materially from those projected in the “forward-looking” statements.

The views expressed in this report reflect those of the portfolio managers, only through the end of the period as stated on the cover. The portfolio managers’ views are subject to change at any time based on market and other conditions.

Portfolio holdings are subject to change daily.

⁽¹⁾

The Barclays Capital U.S. Aggregate Bond Index is a widely recognized, unmanaged index of publicly issued fixed rate U.S. government, investment grade, mortgaged-backed and corporate debt securities.

⁽²⁾

The Strategic Allocation Conservative Composite Index is comprised of the asset class indices that correspond to the particular asset classes in which the Portfolio invests and their benchmark weightings. From time to time, adjustments have been made in the asset classes and/or weightings applicable to the Portfolio, and corresponding adjustments have been made to the composite. See page 9 for additional information.

⁽³⁾

Since inception performance for the indices is shown from January 1, 2007.

⁽⁴⁾

Since inception performance for the indices is shown from August 1, 2005.

Effective March 1, 2002, ING Investments, LLC began serving as investment adviser and ING Investment Management Co., the former investment adviser, began serving as sub-adviser to the Portfolio. Effective April 7, 2008, the Portfolio was converted from a mutual fund, which invested directly in securities, to a fund-of-funds, which invests in other mutual funds.


PORTFOLIO MANAGERS’ REPORT		ING STRATEGIC ALLOCATION GROWTH PORTFOLIO

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Average Annual Total Returns for the Periods Ended December 31, 2009
	1 Year		5 Year		10 Year		Since Inception of Class ADV December 29, 2006		Since Inception of Class S August 5, 2005
Class ADV	25.29	%	—		—		(5.81	)%	—
Class I	25.37	%	0.22	%	0.65	%	—		—
Class S	24.90	%	—		—		—		(0.62	)%
Russell 3000^® Index⁽¹⁾	28.34	%	0.76	%	(0.20	)%	(5.42	)%⁽³⁾	(0.05	)%⁽⁴⁾
Strategic Allocation Growth Composite Index⁽²⁾	26.15	%	1.79	%	2.16	%	(3.49	)%⁽³⁾	1.25	%⁽⁴⁾

Based on a $10,000 initial investment, the graph and table above illustrate the total return of ING Strategic Allocation Growth Portfolio against the indices indicated. An index is unmanaged and has no cash in its portfolio, imposes no sales charges and incurs no operating expenses. An investor cannot invest directly in an index. The Portfolio’s performance is shown without the imposition of any expenses or charges which are, or may be, imposed under your annuity contract. Total returns would have been lower if such expenses or charges were included.

The performance graph and table do not reflect the deduction of taxes that a shareholder will pay on Portfolio distributions or the redemption of Portfolio shares.

This report contains statements that may be “forward-looking” statements. Actual results may differ materially from those projected in the “forward-looking” statements.

Portfolio holdings are subject to change daily.

⁽¹⁾

The Russell 3000^® Index is an unmanaged index that measures the performance of 3000 U.S. companies based on total market capitalization.

⁽²⁾

The Strategic Allocation Growth Composite Index is comprised of the asset class indices that correspond to the particular asset classes in which the Portfolio invests and their benchmark weightings. From time to time, adjustments have been made in the asset classes and/or weightings applicable to the Portfolio, and corresponding adjustments have been made to the composite. See page 9 for additional information.

⁽³⁾

Since inception performance for the indices is shown from January 1, 2007.

⁽⁴⁾

Since inception performance for the indices is shown from August 1, 2005.


PORTFOLIO MANAGERS’ REPORT		ING STRATEGIC ALLOCATION MODERATE PORTFOLIO

LOGO



Average Annual Total Returns for the Periods Ended December 31, 2009
	1 Year		5 Year		10 Year		Since Inception of Class ADV December 29, 2006		Since Inception of Class S June 7, 2005
Class ADV	21.95	%	—		—		(3.96	)%	—
Class I	21.84	%	0.79	%	1.47	%	—		—
Class S	21.60	%	—		—		—		0.44	%
Russell 3000^® Index⁽¹⁾	28.34	%	0.76	%	(0.20	)%	(5.42	)%⁽³⁾	0.99	%⁽⁴⁾
Strategic Allocation Moderate Composite Index⁽²⁾	21.04	%	2.43	%	3.15	%	(1.32	)%⁽³⁾	2.60	%⁽⁴⁾

Based on a $10,000 initial investment, the graph and table above illustrate the total return of ING Strategic Allocation Moderate Portfolio against the indices indicated. An index is unmanaged and has no cash in its portfolio, imposes no sales charges and incurs no operating expenses. An investor cannot invest directly in an index. The Portfolio’s performance is shown without the imposition of any expenses or charges which are, or may be, imposed under your annuity contract. Total returns would have been lower if such expenses or charges were included.

The performance graph and table do not reflect the deduction of taxes that a shareholder will pay on Portfolio distributions or the redemption of Portfolio shares.

This report contains statements that may be “forward-looking” statements. Actual results may differ materially from those projected in the “forward-looking” statements.

Portfolio holdings are subject to change daily.

⁽¹⁾

The Russell 3000^® Index is an unmanaged index that measures the performance of 3000 U.S. companies based on total market capitalization.

⁽²⁾

The Strategic Allocation Moderate Composite Index is comprised of the asset class indices that correspond to the particular asset classes in which the Portfolio invests and their benchmark weightings. From time to time, adjustments have been made in the asset classes and/or weightings applicable to the Portfolio, and corresponding adjustments have been made to the composite. See page 9 for additional information.

⁽³⁾

Since inception performance for the indices is shown from January 1, 2007.

⁽⁴⁾

Since inception performance for the indices is shown from June 1, 2005.


ING STRATEGIC ALLOCATION PORTFOLIOS		PORTFOLIO MANAGERS’ REPORT

ING Strategic Allocation Conservative Portfolio, ING Strategic Allocation Growth Portfolio and ING Strategic Allocation Moderate Portfolio (collectively, the “Portfolios”) seek to obtain their individual investment objectives by investing in a combination of underlying funds (“Underlying Funds”) according to each Portfolio’s fixed formula. The Portfolios are managed by ING Investment Management Co. (“ING IM”) — the Sub-Adviser.

The Sub-Adviser uses the Strategic Allocation Conservative Composite, Strategic Allocation Growth Composite, and Strategic Allocation Moderate

Composite indices (each a “Composite Index”) as benchmarks to which it compares the performance of ING Strategic Allocation Conservative Portfolio, ING Strategic Allocation Growth Portfolio and ING Strategic Allocation Moderate Portfolio, respectively. Each Composite Index is a blended index that is derived from the asset class comparative indices set out in the chart below. The chart shows the weightings for each asset class comparative index represented in each benchmark Composite Index, as a percentage of the Composite Index.


	S&P 500^® Index⁽¹⁾		S&P MidCap 400 Index⁽²⁾		S&P SmallCap 600 Index⁽³⁾		MSCI EAFE^® Index⁽⁴⁾		Dow Jones Wilshire Real Estate Securities Index⁽⁵⁾		Barclays Capital U.S. Aggregate Bond Index⁽⁶⁾		30-Day U.S. T-Bill⁽⁷⁾
Strategic Allocation Conservative Composite	20	%	4	%	4	%	13	%	4	%	50	%	5	%
Strategic Allocation Growth Composite	37	%	9	%	9	%	25	%	5	%	13	%	2	%
Strategic Allocation Moderate Composite	28	%	6	%	6	%	20	%	5	%	32	%	3	%

⁽¹⁾

The S&P 500^® Index is an unmanaged index that measures the performance of securities of approximately 500 of the largest companies in the U.S.

⁽²⁾

The S&P MidCap 400 Index is a market capitalization-weighted index of 400 mid-capitalization stocks chosen for market size, liquidity, and industry group representation.

⁽³⁾

The S&P SmallCap 600 Index is an unmanaged index that measures the performance of the small-size company segment of the U.S. market.

⁽⁴⁾

The MSCI EAFE^® Index is an unmanaged index that measures the performance of securities listed on exchanges in markets in Europe, Australia and the Far East.

⁽⁵⁾

The Dow Jones Wilshire Real Estate Securities Index consists of REITs and real estate operating companies.

⁽⁶⁾

The Barclays Capital U.S. Aggregate Bond Index, formerly known as the Lehman Brothers U.S. Aggregate Bond Index, is a widely recognized, unmanaged index of publicly issued fixed rate U.S. government, investment grade, mortgage-backed, asset backed and corporate debt securities.

⁽⁷⁾

The 30-Day U.S. T-Bill is a U.S. government issued short-term debt sold at a discount and then redeemed at maturity at the full face value.


*Target Allocations^()**	ING Strategic Allocation Conservative Portfolio		ING Strategic Allocation Growth Portfolio		ING Strategic Allocation Moderate Portfolio
U.S. Large-Capitalization Stocks	20	%	37	%	28	%
U.S. Mid-Capitalization Stocks	4	%	9	%	6	%
U.S. Small-Capitalization Stocks	4	%	9	%	6	%
Non-U.S./International Stocks	13	%	25	%	20	%
Real Estate Stocks	4	%	5	%	5	%
Fixed-Income Securities	50	%	13	%	32	%
Cash	5	%	2	%	3	%

	100	%	100	%	100	%

^(*)

Portfolio’s current approximate target investment allocations (expressed as a percentage of its net assets). As these are target allocations, the actual allocations of each Portfolio’s assets may deviate from the percentages shown. Although the Portfolios expect to be fully invested at all times, they may maintain liquidity reserves to meet redemption requests.

All indices are unmanaged.

An investor cannot invest directly in an index.

SHAREHOLDER EXPENSE EXAMPLES (UNAUDITED)

As a shareholder of a Portfolio, you incur two types of costs: (1) transaction costs, including redemption fees; and exchange fees; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Portfolio expenses. These Examples are intended to help you understand your ongoing costs (in dollars) of investing in a Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds.

The Examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2009 to December 31, 2009. The Portfolios’ expenses are shown without the imposition of any charges which are, or may be, imposed under your annuity contract. Expenses would have been higher if such charges were included.

Actual Expenses

The first section of the table shown below, “Actual Portfolio Return,” provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During the Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second section of the table shown below, “Hypothetical (5% return before expenses),” provides information about hypothetical account values and hypothetical expenses based on a Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not a Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in a Portfolio and other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other mutual funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees or exchange fees. Therefore, the hypothetical lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different mutual funds. In addition, if these transactional costs were included, your costs would have been higher.


	Actual Portfolio Return								Hypothetical (5% return before expenses)
	Beginning Account Value July 1, 2009		Ending Account Value December 31, 2009		Annualized Expense Ratio*		Expenses Paid During the Period Ended December 31, 2009**		Beginning Account Value July 1, 2009		Ending Account Value December 31, 2009		Annualized Expense Ratio*		Expenses Paid During the Period Ended December 31, 2009**
ING Strategic Allocation Conservative Portfolio
Class ADV	$	1,000.00	$	1,157.40	0.60	%	$	3.26	$	1,000.00	$	1,022.18	0.60	%	$	3.06
Class I		1,000.00		1,155.70	0.10			0.54		1,000.00		1,024.70	0.10			0.51
Class S		1,000.00		1,155.60	0.35			1.90		1,000.00		1,023.44	0.35			1.79
ING Strategic Allocation Growth Portfolio
Class ADV	$	1,000.00	$	1,214.20	0.63	%	$	3.52	$	1,000.00	$	1,022.03	0.63	%	$	3.21
Class I		1,000.00		1,213.20	0.13			0.73		1,000.00		1,024.55	0.13			0.66
Class S		1,000.00		1,212.00	0.38			2.12		1,000.00		1,023.29	0.38			1.94
ING Strategic Allocation Moderate Portfolio
Class ADV	$	1,000.00	$	1,186.70	0.63	%	$	3.47	$	1,000.00	$	1,022.03	0.63	%	$	3.21
Class I		1,000.00		1,185.60	0.13			0.72		1,000.00		1,024.55	0.13			0.66
Class S		1,000.00		1,183.90	0.38			2.09		1,000.00		1,023.29	0.38			1.94

Expense ratios do not include expenses of the underlying funds.

Expenses are equal to each Portfolio’s respective annualized expense ratios multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half-year.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Shareholders and Board of Directors

ING Strategic Allocation Portfolios, Inc.

We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of ING Strategic Allocation Conservative Portfolio (formerly, ING VP Strategic Allocation Conservative Portfolio), ING Strategic Allocation Growth Portfolio (formerly, ING VP Strategic Allocation Growth Portfolio), and ING Strategic Allocation Moderate Portfolio (formerly, ING VP Strategic Allocation Moderate Portfolio), each a series of ING Strategic Allocation Portfolios, Inc., as of December 31, 2009, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended. These financial statements and financial highlights are the responsibility of management. Our responsibility is to express an opinion on these financial statements and financial highlights 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 and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2009, by correspondence with the transfer agent of the underlying funds. 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 and financial highlights referred to above present fairly, in all material respects, the financial position of the aforementioned portfolios as of December 31, 2009, and the results of their operations, the changes in their net assets, and the financial highlights for the periods specified in the first paragraph above, in conformity with U.S. generally accepted accounting principles.

LOGO

Boston, Massachusetts

February 25, 2010

STATEMENTS OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2009


	ING Strategic Allocation Conservative Portfolio			ING Strategic Allocation Growth Portfolio			ING Strategic Allocation Moderate Portfolio
ASSETS:
Investments in affiliated underlying funds*	$	90,700,303		$	166,433,079		$	164,171,279
Short-term investments in affiliated underlying funds**		4,762,049			3,382,186			5,059,083
Receivables:
Investments in affiliated underlying funds sold		—			587,821			175,584
Fund shares sold		359,807			4,759			78,225
Dividends		3,107			35,417			3,041
Prepaid expenses		2,204			3,948			3,946
Reimbursement due from manager		8,151			8,321			1,272

Total assets		95,835,621			170,455,531			169,492,430

LIABILITIES:
Payable for investments in affiliated underlying funds purchased		360,094			372			558
Payable for fund shares redeemed		236			592,580			253,808
Payable to affiliates		11,252			19,747			19,943
Payable for directors fees		4,195			4,451			7,122
Other accrued expenses and liabilities		36,476			51,618			58,410

Total liabilities		412,253			668,768			339,841

NET ASSETS	$	95,423,368		$	169,786,763		$	169,152,589



NET ASSETS WERE COMPRISED OF:
Paid-in capital	$	113,227,184		$	223,125,407		$	213,711,010
Undistributed net investment income		4,335,805			6,188,625			6,816,339
Accumulated net realized loss on investments in affiliated underlying funds and foreign currency related transactions		(17,636,793	)		(45,738,658	)		(39,886,243	)
Net unrealized depreciation on investments in affiliated underlying funds and foreign currency related transactions		(4,502,828	)		(13,788,611	)		(11,488,517	)

NET ASSETS	$	95,423,368		$	169,786,763		$	169,152,589


* Cost of investments in affiliated underlying funds	$	95,203,503		$	180,226,988		$	175,660,138
** Cost of short-term investments in affiliated underlying funds	$	4,762,049		$	3,382,186		$	5,059,083

Class ADV:
Net assets	$	723		$	551		$	626
Shares authorized		100,000,000			100,000,000			100,000,000
Par value	$	0.001		$	0.001		$	0.001
Shares outstanding		74			59			65
Net asset value and redemption price per share	$	9.78		$	9.41		$	9.60
Class I:
Net assets	$	93,791,820		$	168,070,783		$	166,449,100
Shares authorized		100,000,000			100,000,000			100,000,000
Par value	$	0.001		$	0.001		$	0.001
Shares outstanding		9,570,479			17,900,345			17,368,308
Net asset value and redemption price per share	$	9.80		$	9.39		$	9.58
Class S:
Net assets	$	1,630,825		$	1,715,429		$	2,702,863
Shares authorized		100,000,000			100,000,000			100,000,000
Par value	$	0.001		$	0.001		$	0.001
Shares outstanding		167,621			184,076			283,525
Net asset value and redemption price per share	$	9.73		$	9.32		$	9.53

See Accompanying Notes to Financial Statements

STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2009


	ING Strategic Allocation Conservative Portfolio			ING Strategic Allocation Growth Portfolio			ING Strategic Allocation Moderate Portfolio
INVESTMENT INCOME:
Dividends from affiliated underlying funds	$	4,419,771		$	6,384,830		$	7,014,431

Total investment income		4,419,771			6,384,830			7,014,431

EXPENSES:
Investment management fees		68,764			120,279			121,803
Distribution and service fees:
Class ADV		3			3			3
Class S		3,612			3,571			5,720
Transfer agent fees		513			537			730
Administrative service fees		47,273			82,541			83,736
Shareholder reporting expense		21,783			19,880			26,217
Registration fees		—			675			673
Professional fees		12,921			40,673			46,045
Custody and accounting expense		869			6,965			5,474
Directors fees		8,275			10,928			12,305
Miscellaneous expense		13,487			17,639			19,007

Total expenses		177,500			303,691			321,713
Net waived and reimbursed fees		(87,411	)		(104,026	)		(117,081	)

Net expenses		90,089			199,665			204,632

Net investment income		4,329,682			6,185,165			6,809,799

REALIZED AND UNREALIZED GAIN (LOSS) ON AFFILIATED UNDERLYING FUNDS AND FOREIGN CURRENCY RELATED TRANSACTIONS:
Net realized gain (loss) on:
Capital gain distributions from affiliated underlying funds		6,375			4,264			6,651
Sale of affiliated underlying funds		(14,197,445	)		(40,240,834	)		(33,515,575	)
Foreign currency related transactions		67			423			659

Net realized loss on affiliated underlying funds and foreign currency related transactions		(14,191,003	)		(40,236,147	)		(33,508,265	)

Net change in unrealized appreciation or depreciation on:
Affiliated underlying funds		24,238,274			69,463,536			57,158,681
Foreign currency related transactions		(211	)		326			(903	)

Net change in unrealized appreciation or depreciation on affiliated underlying funds and foreign currency related transactions		24,238,063			69,463,862			57,157,778

Net realized and unrealized gain on affiliated underlying funds and foreign currency related transactions		10,047,060			29,227,715			23,649,513

Increase in net assets resulting from operations	$	14,376,742		$	35,412,880		$	30,459,312

See Accompanying Notes to Financial Statements

STATEMENTS OF CHANGES IN NET ASSETS


	ING Strategic Allocation Conservative Portfolio						ING Strategic Allocation Growth Portfolio
	Year Ended December 31, 2009			Year Ended December 31, 2008			Year Ended December 31, 2009			Year Ended December 31, 2008
FROM OPERATIONS:
Net investment income	$	4,329,682		$	4,581,102		$	6,185,165		$	5,929,686
Net realized gain (loss) on affiliated underlying funds and foreign currency related transactions		(14,191,003	)		(218,564	)		(40,236,147	)		13,956,689
Net change in unrealized appreciation or depreciation on affiliated underlying funds and foreign currency related transactions		24,238,063			(33,862,680	)		69,463,862			(108,538,763	)

Increase (decrease) in net assets resulting from operations		14,376,742			(29,500,142	)		35,412,880			(88,652,388	)

FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class ADV		(56	)		(35	)		(54	)		(17	)
Class I		(7,207,695	)		(4,826,048	)		(15,357,206	)		(5,205,257	)
Class S		(121,212	)		(60,248	)		(142,132	)		(20,702	)
Net realized gains:
Class ADV		—			(75	)		(31	)		(116	)
Class I		—			(9,527,565	)		(8,405,469	)		(29,584,058	)
Class S		—			(124,012	)		(79,792	)		(122,997	)

Total distributions		(7,328,963	)		(14,537,983	)		(23,984,684	)		(34,933,147	)

FROM CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares		7,978,159			8,825,341			8,911,923			10,222,946
Reinvestment of distributions		7,328,907			14,537,872			23,984,598			34,933,017

		15,307,066			23,363,213			32,896,521			45,155,963
Cost of shares redeemed		(14,557,135	)		(30,167,551	)		(22,722,314	)		(43,698,895	)

Net increase (decrease) in net assets resulting from capital share transactions		749,931			(6,804,338	)		10,174,207			1,457,068

Net increase (decrease) in net assets		7,797,710			(50,842,463	)		21,602,403			(122,128,467	)

NET ASSETS:
Beginning of year		87,625,658			138,468,121			148,184,360			270,312,827

End of year	$	95,423,368		$	87,625,658		$	169,786,763		$	148,184,360

Undistributed net investment income at end of year	$	4,335,805		$	7,328,644		$	6,188,625		$	15,498,327

See Accompanying Notes to Financial Statements

STATEMENTS OF CHANGES IN NET ASSETS


	ING Strategic Allocation Moderate Portfolio
	Year Ended December 31, 2009			Year Ended December 31, 2008
FROM OPERATIONS:
Net investment income	$	6,809,799		$	7,139,595
Net realized gain (loss) on affiliated underlying funds and foreign currency related transactions		(33,508,265	)		7,488,873
Net change in unrealized appreciation or depreciation on affiliated underlying funds and foreign currency related transactions		57,157,778			(88,682,517	)

Increase (decrease) in net assets resulting from operations		30,459,312			(74,054,049	)

FROM DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class ADV		(55	)		(21	)
Class I		(14,264,050	)		(6,653,236	)
Class S		(206,494	)		(32,570	)
Net realized gains:
Class ADV		(20	)		(105	)
Class I		(4,723,706	)		(26,032,806	)
Class S		(70,284	)		(136,028	)

Total distributions		(19,264,609	)		(32,854,766	)

FROM CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares		10,438,408			11,572,906
Reinvestment of distributions		19,264,534			32,854,640

		29,702,942			44,427,546
Cost of shares redeemed		(26,902,763	)		(47,312,829	)

Net increase (decrease) in net assets resulting from capital share transactions		2,800,179			(2,885,283	)

Net increase (decrease) in net assets		13,994,882			(109,794,098	)

NET ASSETS:
Beginning of year		155,157,707			264,951,805

End of year	$	169,152,589		$	155,157,707

Undistributed net investment income at end of year	$	6,816,339		$	14,470,427

See Accompanying Notes to Financial Statements

FINANCIAL HIGHLIGHTS

Selected data for a share of beneficial interest outstanding throughout each year or period.


		Income (loss) from investment operations						Less distributions							Ratios to average net assets							Supplemental data

	Net asset value, beginning of year or period	Net investment income (loss)		Net realized and unrealized gain (loss)		Total from investment operations		From net investment income	From net realized gains	From return of capital	Total distributions	Net asset value, end of year or period	Total Return (1)		Expenses before reductions/ additions(2)(3)(4)	Expenses net of fee waivers and/or recoupments, if any(2)(3)(4)		Expenses net of all reductions/ additions(2)(3)(4)		Net investment income (loss)(2)(3)(4)		Net assets, end of year or period	Portfolio turnover rate

Year or period ended	($)	($)		($)		($)		($)	($)	($)	($)	($)	(%)		(%)	(%)		(%)		(%)		($000's)	(%)
ING Strategic Allocation Conservative Portfolio
Class ADV
12-31-09	9.06	0.41		1.07		1.48		0.76	—	—	0.76	9.78	18.04		0.70	0.60		0.60		4.50		1	56
12-31-08	13.44	0.40		(3.33	)	(2.93	)	0.46	0.99	—	1.45	9.06	(24.07	)	0.89	0.77	^†	0.77	^†	3.63	^†	1	277
12-31-07	13.53	0.38	^·	0.32		0.70		0.45	0.34	—	0.79	13.44	5.43		1.23	1.15	^†	1.15	^†	2.86	^†	1	422
12-29-06⁽⁵⁾ - 12-31-06	13.53	(0.00	)*	—		(0.00	)*	—	—	—	—	13.53	—		1.22	1.15		1.15		(1.15	)	1	335
Class I
12-31-09	9.13	0.45	^·	1.03		1.48		0.81	—	—	0.81	9.80	18.00		0.20	0.10		0.10		5.04		93,792	56
12-31-08	13.51	0.51		(3.39	)	(2.88	)	0.51	0.99	—	1.50	9.13	(23.65	)	0.39	0.27	^†	0.27	^†	3.99	^†	86,257	277
12-31-07	13.55	0.46	^·	0.29		0.75		0.45	0.34	—	0.79	13.51	5.80		0.73	0.65	^†	0.65	^†	3.40	^†	136,938	422
12-31-06	13.27	0.42	^·	0.64		1.06		0.35	0.43	—	0.78	13.55	8.37		0.72	0.65		0.65		3.18		146,397	335
12-31-05	13.04	0.34		0.15		0.49		0.26	—	—	0.26	13.27	3.83		0.75	0.65		0.65		2.53		151,565	364
Class S
12-31-09	9.06	0.43	^·	1.02		1.45		0.78	—	—	0.78	9.73	17.79		0.45	0.35		0.35		4.89		1,631	56
12-31-08	13.44	0.39		(3.29	)	(2.90	)	0.49	0.99	—	1.48	9.06	(23.92	)	0.64	0.52	^†	0.52	^†	3.89	^†	1,368	277
12-31-07	13.50	0.42	^·	0.29		0.71		0.43	0.34	—	0.77	13.44	5.53		0.98	0.90	^†	0.90	^†	3.18	^†	1,529	422
12-31-06	13.25	0.39	^·	0.64		1.03		0.35	0.43	—	0.78	13.50	8.13		0.97	0.90		0.90		3.00		717	335
08-05-05⁽⁵⁾ - 12-31-05	13.06	0.06		0.13		0.19		—	—	—	—	13.25	1.45		1.00	0.90		0.90		2.68		118	364

ING Strategic Allocation Growth Portfolio
Class ADV
12-31-09	9.01	0.35		1.50		1.85		0.92	0.53	—	1.45	9.41	25.29		0.70	0.63		0.63		4.01		1	75
12-31-08	16.50	0.30		(5.58	)	(5.28	)	0.28	1.93	—	2.21	9.01	(36.27	)	0.89	0.83	^†	0.83	^†	2.35	^†	1	235
12-31-07	17.06	0.22		0.53		0.75		0.30	1.01	—	1.31	16.50	4.62		1.21	1.21	^†	1.21	^†	1.34	^†	1	240
12-29-06⁽⁵⁾ - 12-31-06	17.06	(0.00	)*	—		(0.00	)*	—	—	—	—	17.06	—		1.21	1.21		1.21		(1.21	)	1	233
Class I
12-31-09	9.04	0.37		1.48		1.85		0.97	0.53	—	1.50	9.39	25.37		0.20	0.13		0.13		4.12		168,071	75
12-31-08	16.57	0.38		(5.65	)	(5.27	)	0.33	1.93	—	2.26	9.04	(36.13	)	0.39	0.33	^†	0.33	^†	2.83	^†	146,862	235
12-31-07	17.06	0.30	^·	0.52		0.82		0.30	1.01	—	1.31	16.57	5.04		0.71	0.71	^†	0.71	^†	1.79	^†	269,587	240
12-31-06	15.48	0.28	^·	1.73		2.01		0.22	0.21	—	0.43	17.06	13.19		0.71	0.71		0.71		1.77		298,451	233
12-31-05	14.76	0.22		0.68		0.90		0.18	—	—	0.18	15.48	6.20		0.73	0.73		0.73		1.43		287,566	232
Class S
12-31-09	8.99	0.32	^·	1.49		1.81		0.95	0.53	—	1.48	9.32	24.90		0.45	0.38		0.38		3.88		1,715	75
12-31-08	16.49	0.32	^·	(5.57	)	(5.25	)	0.32	1.93	—	2.25	8.99	(36.19	)	0.64	0.58	^†	0.58	^†	2.72	^†	1,322	235
12-31-07	17.00	0.26	^·	0.52		0.78		0.28	1.01	—	1.29	16.49	4.77		0.96	0.96	^†	0.96	^†	1.55	^†	725	240
12-31-06	15.46	0.23	^·	1.73		1.96		0.21	0.21	—	0.42	17.00	12.91		0.96	0.96		0.96		1.47		308	233
08-05-05⁽⁵⁾ - 12-31-05	14.98	0.06		0.42		0.48		—	—	—	—	15.46	3.20		0.98	0.98		0.98		1.27		29	232

See Accompanying Notes to Financial Statements

FINANCIAL HIGHLIGHTS (CONTINUED)

Selected data for a share of beneficial interest outstanding throughout each year or period.


		Income (loss) from investment operations						Less distributions							Ratios to average net assets							Supplemental data

	Net asset value, beginning of year or period	Net investment income (loss)		Net realized and unrealized gain (loss)		Total from investment operations		From net investment income	From net realized gains	From return of capital	Total distributions	Net asset value, end of year or period	Total Return (1)		Expenses before reductions/ additions(2)(3)(4)	Expenses net of all reductions/ additions(2)(3)(4)		Expenses net of fee waivers and/or recoupments, if any(2)(3)(4)		Net investment income (loss)(2)(3)(4)		Net assets, end of year or period	Portfolio turnover rate

Year or period ended	($)	($)		($)		($)		($)	($)	($)	($)	($)	(%)		(%)	(%)		(%)		(%)		($000's)	(%)
ING Strategic Allocation Moderate Portfolio
Class ADV
12-31-09	9.06	0.37		1.33		1.70		0.86	0.30	—	1.16	9.60	21.95		0.71	0.63		0.63		3.97		1	62
12-31-08	15.07	0.35		(4.48	)	(4.13	)	0.32	1.56	—	1.88	9.06	(30.75	)	0.88	0.81	^†	0.81	^†	2.85	^†	1	255
12-31-07	15.32	0.27		0.44		0.71		0.36	0.60	—	0.96	15.07	4.87		1.22	1.20	^†	1.20	^†	1.83	^†	1	302
12-29-06⁽⁵⁾ - 12-31-06	15.32	(0.00	)*	—		(0.00	)*	—	—	—	—	15.32	—		1.21	1.20		1.20		(1.20	)	1	258
Class I
12-31-09	9.10	0.39	^·	1.30		1.69		0.91	0.30	—	1.21	9.58	21.84		0.21	0.13		0.13		4.47		166,449	62
12-31-08	15.16	0.44		(4.54	)	(4.10	)	0.40	1.56	—	1.96	9.10	(30.48	)	0.38	0.31	^†	0.31	^†	3.35	^†	152,965	255
12-31-07	15.32	0.36	^·	0.44		0.80		0.36	0.60	—	0.96	15.16	5.48		0.72	0.70	^†	0.70	^†	2.36	^†	263,759	302
12-31-06	14.35	0.33	^·	1.23		1.56		0.27	0.32	—	0.59	15.32	11.17		0.71	0.70		0.70		2.26		298,715	258
12-31-05	13.91	0.26	^·	0.39		0.65		0.21	—	—	0.21	14.35	4.70		0.74	0.70		0.70		1.89		289,673	301
Class S
12-31-09	9.05	0.38		1.28		1.66		0.88	0.30	—	1.18	9.53	21.60		0.46	0.38		0.38		4.34		2,703	62
12-31-08	15.10	0.37	^·	(4.48	)	(4.11	)	0.38	1.56	—	1.94	9.05	(30.68	)	0.63	0.56	^†	0.56	^†	3.30	^†	2,192	255
12-31-07	15.27	0.32	^·	0.44		0.76		0.33	0.60	—	0.93	15.10	5.25		0.97	0.95	^†	0.95	^†	2.11	^†	1,192	302
12-31-06	14.34	0.29	^·	1.22		1.51		0.26	0.32	—	0.58	15.27	10.80		0.96	0.95		0.95		2.00		693	258
06-07-05⁽⁵⁾ - 12-31-05	14.02	0.17	^·	0.36		0.53		0.21	—	—	0.21	14.34	3.81		0.99	0.95		0.95		1.80		362	301

⁽¹⁾

Total return is calculated assuming reinvestment of all dividends, capital gain distributions and return of capital, if any, at net asset value and does not reflect the effect of insurance contract charges. Total return for periods less than one year is not annualized.

⁽²⁾

Annualized for periods less than one year.

⁽³⁾

Expense ratios do not include expenses of underlying funds and do not include fees and expenses charged under the variable annuity contract or life insurance policy.

⁽⁴⁾

Expense ratios reflect operating expenses of a Portfolio. Expenses before reductions/additions do not reflect amounts reimbursed by the Investment Adviser and/or the Distributor or reductions from brokerage commission recapture arrangements or other expense offset arrangements and do not represent the amount paid by a Portfolio during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the Investment Adviser and/or Distributor but prior to reductions from brokerage commission recapture arrangements or other expense offset arrangements. Expenses net of all reductions/additions represent the net expenses paid by a Portfolio. Net investment income (loss) is net of all such additions or reductions.

⁽⁵⁾

Commencement of operations.

^·

Calculated using average number of shares outstanding throughout the period.

Amount is more than $(0.005).

†

Impact of waiving the advisory fee for the ING Institutional Prime Money Market Fund holding has less than 0.005% impact on the expense ratio and net investment income ratio.

See Accompanying Notes to Financial Statements

NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2009

NOTE 1 — ORGANIZATION

Organization. ING Strategic Allocation Portfolios, Inc. (the “Company”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company.

The Company was incorporated under the laws of Maryland on October 14, 1994. There are three separate investment series (each a “Portfolio”, collectively the “Portfolios”) that comprise the Company, ING Strategic Allocation Conservative Portfolio (“Strategic Allocation Conservative”), ING Strategic Allocation Growth Portfolio (“Strategic Allocation Growth”), and ING Strategic Allocation Moderate Portfolio (“Strategic Allocation Moderate”). Each Portfolio currently seeks to achieve its investment objective by investing in other ING Funds (“Underlying Funds”) and each uses asset allocation strategies to determine how to invest in the Underlying Funds. The Underlying Funds, in turn, invest in equity and fixed-income securities and money market instruments.

Each Portfolio offers Adviser (“ADV”) Class, Class I and Class S shares. The three classes differ principally in the applicable distribution and service fees. Shareholders of each class also bear certain expenses that pertain to that particular class. All shareholders bear the common expenses of the Portfolios and earn income and realized gains/losses from a Portfolio pro rata based on the average daily net assets of each class, without distinction between share classes. Common expenses of the Portfolios (including custodial asset-based fees, legal and audit fees, printing and mailing expenses, transfer agency out-of-pocket expenses, and fees and expenses of the independent trustees) are allocated to each Portfolio in proportion to its average net assets. Expenses directly attributable to a particular Portfolio (including advisory, administration, custodial transaction-based, registration, other professional, distribution and/or service fees, certain taxes, and offering costs) are charged directly to that Portfolio. Differences in per share dividend rates generally result from differences in separate class expenses, including distribution and shareholder service fees, if applicable.

Shares of the Portfolios may be offered to separate accounts of insurance companies as investment options under variable annuity contracts and variable life insurance policies (“Variable Contracts”). Shares may also be offered to qualified pension and retirement plans outside the Variable Contract and to certain investment advisers and their affiliates.

Participating insurance companies and other designated organizations are authorized to receive purchase orders on each Portfolio’s behalf.

ING Investments, LLC (“ING Investments” or the “Investment Adviser”), an Arizona limited liability company, serves as the investment adviser to the Portfolios. ING Investments has engaged ING Investment Management Co. (“ING IM”), a Connecticut corporation, to serve as the sub-adviser to the Portfolios. ING Funds Distributor, LLC (the “Distributor” or ”IFD”) is the principal underwriter of the Portfolios. ING Investments, ING IM and the Distributor are indirect, wholly-owned subsidiaries of ING Groep N.V. (“ING Groep”). ING Groep is a global financial institution of Dutch origin offering banking, investments, life insurance and retirement services.

On October 19, 2008, ING Groep announced that it reached an agreement with the Dutch government to strengthen its capital position. ING Groep issued non-voting core Tier-1 securities for a total consideration of EUR 10 billion to the Dutch State. The transaction boosted ING Bank’s core Tier-1 ratio, strengthened the insurance balance sheet and reduced ING Groep’s Debt/Equity ratio.

On October 26, 2009, ING Groep announced that it will move towards a complete separation of its banking and insurance operations. A formal restructuring plan (“Restructuring Plan”) was submitted to the European Commission (“EC”), which approved it on November 18, 2009. It is expected that the Restructuring Plan will be achieved over the next four years by a divestment of all insurance operations (including ING Investment Management) as well as a divestment of ING Direct US by the end of 2013. ING Groep will explore all options, including initial public offerings, sales or combinations thereof.

On December 21, 2009, ING Groep announced that it has completed its planned repurchase of EUR 5 billion of Core Tier 1 securities issued in November 2008 to the Dutch State and its EUR 7.5 billion rights issue.

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies are consistently followed by the Portfolios in the preparation of their financial statements. Such policies are in conformity with U.S. generally accepted accounting principles for investment companies.

A.	Security Valuation. The valuations of the Portfolios’ investments in Underlying Funds are based on the

NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2009 (CONTINUED)

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (continued)

net asset value of the Underlying Funds each business day.

Fair value is defined as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. Each investment asset or liability of the Fund is assigned a level at measurement date based on the significance and source of the inputs to its valuation. Quoted prices in active markets for identical securities are classified as “Level 1”, inputs other than quoted prices for an asset or liability that are observable are classified as “Level 2” and unobservable inputs, including the sub-adviser’s judgment about the assumptions that a market participant would use in pricing an asset or liability are classified as “Level 3”. The inputs used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. Securities valued at amortized cost are generally considered to be Level 2 securities under applicable accounting rules. A table summarizing the Fund’s investments under these levels of classification is included following the Portfolio of Investments.

For the year ended December 31, 2009, there have been no significant changes to the fair valuation methodologies.

On April 9, 2009, the Financial Accounting Standards Board (“FASB”) issued additional guidance related to fair value measurements entitled, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly. This guidance requires enhanced disclosures about the inputs and valuation technique(s) used to measure fair value and a discussion of changes in valuation techniques and related inputs, if any, during the period. In addition, the three-level hierarchy disclosure and the level three roll-forward disclosure are to be expanded for each major category of equity and debt securities. There was no change to the financial position of the Portfolios and the results of their operations due to the adoption of this guidance and all disclosures have been made for the current period as part of the Notes to Financial Statements and Portfolio of Investments.

The Portfolios classify each of their investments in the Underlying Funds as Level 1, without consideration as to the classification level of the specific investments held by the Underlying Funds.

Security Transactions and Revenue Recognition. Security transactions are accounted for on trade date. Dividend income received from the affiliated funds is recognized on the ex-dividend date and is recorded as income distributions in the Statement of Operations. Capital gain distributions received from the affiliated funds are recognized on ex-dividend date and are recorded on the Statement of Operations as such. Costs used in determining realized gains and losses on the sales of investment securities are on the basis of specific identification.

Distributions to Shareholders. The Portfolios record distributions to their shareholders on the ex-dividend date. Dividends from net investment income and capital gains, if any, are declared and paid annually by the Portfolios. The Portfolios may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code. The characteristics of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles for investment companies.

Federal Income Taxes. It is the policy of each Portfolio to comply with subchapter M of the Internal Revenue Code and related excise tax provisions applicable to regulated investment companies and to distribute substantially all of its net investment income and any net realized capital gains to their shareholders. Management has considered the sustainability of the Portfolios’ tax positions taken on federal income tax returns for all open tax years in making this determination. Therefore, no federal income tax provision is required. No capital gain distributions shall be made until any capital loss carryforwards have been fully utilized or expired.

Use of Estimates. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the

NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2009 (CONTINUED)

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (continued)

reporting period. Actual results could differ from those estimates.

Indemnifications. In the normal course of business, the Company may enter into contracts that provide certain indemnifications. The Company’s maximum exposure under these arrangements is dependent on future claims that may be made against the Portfolios and, therefore, cannot be estimated; however, based on experience, management believes the risk of loss from such claims is considered remote.

NOTE 3 — INVESTMENT TRANSACTIONS

For the year ended December 31, 2009, the cost of purchases and the proceeds from the sales of the Underlying Funds, were as follows:


	Purchases		Sales
Strategic Allocation Conservative	$	46,129,592	$	48,364,625
Strategic Allocation Growth		109,782,246		117,104,388
Strategic Allocation Moderate		91,604,208		101,163,526

NOTE 4 — INVESTMENT MANAGEMENT AND ADMINISTRATIVE FEES

The Portfolios entered into an investment management agreement (“Investment Management Agreement”) with the Investment Adviser.

During periods when each Portfolio invests all, or substantially all of its assets in another investment company, the Investment Management Agreement compensates the Investment Adviser with a fee of 0.08%, computed daily and payable monthly, based on the average daily net assets of each Portfolio.

During periods when the Portfolios invest directly in investment securities, each Portfolio pays the Investment Adviser a fee of 0.60%, computed daily and payable monthly, based on the amount of average daily net assets of each Portfolio invested in such direct investment.

The Investment Adviser entered into a sub-advisory agreement with ING IM. Subject to such policies as the Board or the Investment Adviser may determine, ING IM manages the Portfolios’ assets in accordance with the Portfolios’ investment objectives, policies, and limitations.

Pursuant to the Administration Agreement, ING Funds Services, LLC (“IFS”), an indirect, wholly-owned

subsidiary of ING Groep, acts as administrator and provides certain administrative and shareholder services necessary for Portfolio operations and is responsible for the supervision of other service providers. IFS is entitled to receive from each Portfolio a fee at an annual rate of 0.055% on the first $5 billion of daily net assets and 0.03% thereafter.

NOTE 5 — DISTRIBUTION AND SERVICE FEES

ADV Class shares of the Portfolios are subject to a Shareholder Service and Distribution Plan (the “Plan”). Under the Plan, the Distributor is paid an annual shareholder service fee at the rate of 0.25% and an annual distribution fee at the rate of 0.25% of the average daily net assets attributable to its ADV Class shares.

Class S shares of the Portfolios have adopted a Distribution Plan pursuant to Rule 12b-1 under the 1940 Act (the “12b-1 Plans”), whereby the Distributor is compensated by each Portfolio for expenses incurred in the distribution of each Portfolio’s Class S shares. Pursuant to the 12b-1 Plans, the Distributor is entitled to a payment each month to compensate for expenses incurred in the distribution and promotion of each Portfolio’s S shares, including expenses incurred in printing prospectuses and reports used for sales purposes, expenses incurred in preparing and printing sales literature and other such distribution related expenses, including any distribution or shareholder servicing fees paid to securities dealers who have executed a distribution agreement with the Distributor. Under the 12b-1 Plans, Class S shares of the Portfolios pay the Distributor a fee calculated at an annual rate of 0.25% of average daily net assets.

NOTE 6 — OTHER TRANSACTIONS WITH AFFILIATED AND RELATED PARTIES

At December 31, 2009, the Portfolios had the following amounts recorded in payable to affiliates on the accompanying Statements of Assets and Liabilities (see Notes 4 and 5):


Portfolio	Accrued Investment Management Fees		Accrued Administrative Fees		Accrued Shareholder Service and Distribution Fees		Total
Strategic Allocation Conservative	$	6,465	$	4,444	$	343	$	11,252
Strategic Allocation Growth		11,488		7,897		362		19,747
Strategic Allocation Moderate		11,480		7,892		571		19,943

NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2009 (CONTINUED)

NOTE 6 — OTHER TRANSACTIONS WITH AFFILIATED AND RELATED PARTIES (continued)

At December 31, 2009, the following wholly-owned subsidiaries of ING Groep owned more than 5% of the following Portfolios:

ING Life Insurance and Annuity Company — Strategic Allocation Conservative (93.48%); Strategic Allocation Growth (94.65%); Strategic Allocation Moderate (93.68%).

Control is defined by the 1940 Act as the beneficial ownership, either directly or through one or more controlled companies, of more than 25% of the voting securities of a company. The 1940 Act defines affiliates as companies that are under common control. Therefore, because the Portfolios have a common owner that owns over 25% of the outstanding securities of the Portfolios, they may be deemed to be affiliates of each other. Investment activities of these shareholders could have a material impact on the Portfolios.

The Company has adopted a Deferred Compensation Plan (“Policy”), which allows eligible non-affiliated directors as described in the Policy to defer the receipt of all or a portion of the directors’ fees payable. Amounts deferred are treated as though invested in various “notional” funds advised by ING Investments until distribution in accordance with the Policy.

NOTE 7 — OTHER ACCRUED EXPENSES & LIABILITIES

At December 31, 2009, the following Portfolios had the below payables included in Other Accrued Expenses and Liabilities on the Statement of Assets and Liabilities that exceeded 5% of total liabilities:


Portfolio	Accrued Expenses	Amount
Strategic Allocation Moderate	Audit	$	23,534

NOTE 8 — EXPENSE LIMITATION AGREEMENTS

ING Investments entered into written expense limitation agreements (“Expense Limitation Agreements”) with each of the Portfolios whereby the Investment Adviser has agreed to limit expenses, excluding interest, taxes, brokerage commissions and extraordinary expenses to the levels listed below:


Portfolio⁽¹⁾	Class ADV		Class I		Class S
Strategic Allocation Conservative	1.15	%	0.65	%	0.90	%
Strategic Allocation Growth⁽²⁾	1.25	%	0.75	%	1.00	%
Strategic Allocation Moderate	1.20	%	0.70	%	0.95	%

⁽¹⁾

These operating expense limits take into account operating expenses incurred at the underlying fund level. The amount of fees and expenses of an Underlying Fund borne by each Portfolio will vary based on each Portfolio’s allocation of assets to, and the net expenses of, a particular Underlying Fund.

⁽²⁾	Effective April 4, 2008, the side expense limits for the Portfolio are 1.21%, 0.71% and 0.96% for Classes ADV, I and S, respectively through April 4, 2011.

The Investment Adviser may at a later date recoup from a Portfolio for management fees waived and other expenses assumed by the Investment Adviser during the previous 36 months, but only if, after such recoupment, the Portfolio’s expense ratio does not exceed the percentage described above. Waived and reimbursed fees and any recoupment by the Investment Adviser of such waived and reimbursed fees are reflected on the accompanying Statements of Operations for each Portfolio. Amounts payable by the Investment Adviser are reflected on the accompanying Statements of Assets and Liabilities for each Portfolio.

As of December 31, 2009, the amounts of waived and reimbursed fees that are subject to possible recoupment by the Investment Adviser, and the related expiration dates are as follows:


	December 31,
	2010		2011		2012		Total

Strategic Allocation Conservative	$	106,690	$	129,459	$	87,726	$	323,875
Strategic Allocation Growth		—		106,927		104,243		211,170
Strategic Allocation Moderate		50,875		142,971		117,421		311,267

The Expense Limitation Agreements are contractual and shall renew automatically for one-year terms unless ING Investments provides written notice of the termination of an Expense Limitation Agreement within 90 days of the end of the then current term.

NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2009 (CONTINUED)

NOTE 9 — CAPITAL SHARES

Transactions in capital shares and dollars were as follows:


	Shares sold	Reinvestment of distributions	Shares redeemed		Net increase (decrease) in shares outstanding		Shares sold	Reinvestment of distributions	Shares redeemed		Net increase (decrease)
Year or period ended	#	#	#		#		($)	($)	($)		($)
Strategic Allocation Conservative
Class ADV
12-31-09	—	—	(1	)	(1	)	—	—	(10	)	(10	)
12-31-08	—	—	(1	)	(1	)	—	—	(13	)	(13	)
Class S
12-31-09	29,074	15,057	(27,514	)	16,617		255,738	121,212	(240,953	)	135,997
12-31-08	54,595	16,037	(33,360	)	37,272		641,111	184,260	(366,348	)	459,023
Class I
12-31-09	852,622	888,742	(1,617,628	)	123,736		7,722,421	7,207,695	(14,316,172	)	613,944
12-31-08	687,409	1,242,737	(2,619,026	)	(688,880	)	8,184,230	14,353,612	(29,801,190	)	(7,263,348	)
ING Strategic Allocation Growth Portfolio
Class ADV
12-31-09	—	—	—		—		—	—	—		—
12-31-08	—	—	(1	)	(1	)	—	—	(12	)	(12	)
Class S
12-31-09	27,442	30,652	(21,168	)	36,926		224,203	221,924	(167,575	)	278,552
12-31-08	116,361	10,886	(24,057	)	103,190		1,554,449	143,702	(300,466	)	1,397,685
Class I
12-31-09	1,042,845	3,264,104	(2,649,175	)	1,657,774		8,687,720	23,762,674	(22,554,739	)	9,895,655
12-31-08	765,527	2,623,629	(3,420,752	)	(31,596	)	8,668,497	34,789,315	(43,398,417	)	59,395
ING Strategic Allocation Moderate Portfolio
Class ADV
12-31-09	—	—	(1	)	(1	)	—	—	(11	)	(11	)
12-31-08	—	—	(1	)	(1	)	—	—	(14	)	(14	)
Class S
12-31-09	33,696	36,275	(28,604	)	41,367		287,870	276,778	(233,507	)	331,141
12-31-08	180,986	13,641	(31,387	)	163,240		2,226,808	168,600	(369,565	)	2,025,843
Class I
12-31-09	1,170,739	2,478,819	(3,099,864	)	549,694		10,150,538	18,987,756	(26,669,245	)	2,469,049
12-31-08	782,124	2,635,971	(3,999,526	)	(581,431	)	9,346,098	32,686,040	(46,943,250	)	(4,911,112	)

NOTE 10 — CONCENTRATION OF INVESTMENT RISK

The Portfolios are also affected by other kinds of risks, depending on the types of securities held or strategies used by an Underlying Fund.

Investment by Funds-of-Funds. Each of the Underlying Funds’ shares may be purchased by other investment companies. In some cases, an Underlying Fund may experience large inflows or redemptions due to

allocations or rebalancings. While it is impossible to predict the overall impact of these transactions over time, there could be adverse effects on portfolio management. The Investment Adviser will monitor transactions by each Portfolio and will attempt to minimize any adverse effects on the Underlying Funds and the Portfolio as a result of these transactions. So long as an Underlying Fund accepts investments by other investment companies, it will not purchase

NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2009 (CONTINUED)

NOTE 10 — CONCENTRATION OF INVESTMENT RISK (continued)

securities of other investment companies, except to the extent permitted by the 1940 Act or under the terms of an exemptive order granted by the SEC.

Foreign Securities. Investments in foreign securities may entail risks not present in domestic investments. Since securities in which an Underlying Fund may invest are denominated in foreign currencies, changes in the relationship of these foreign currencies to the U.S. dollar can significantly affect the value of the investments and earnings of the Underlying Funds. Foreign investments may also subject the Underlying Funds to foreign government exchange restrictions, expropriation, taxation or other political, social or economic developments, as well as changes vis-à-vis the U.S. dollar from movements in currency, and changes in security value and interest rate, all of which could affect the market and/or credit risk of the Underlying Funds’ investments.

Emerging Markets Investments. Certain Underlying Funds may invest in emerging markets. Because of less developed markets and economies and, in some countries, less mature governments and governmental institutions, the risks of investing in foreign securities can be intensified in the case of investments in issuers domiciled or doing substantial business in countries with an emerging securities market. These risks include: high concentration of market capitalization and trading volume in a small number of issuers representing a limited number of industries, as well as a high concentration of investors and financial intermediaries; political and social uncertainties; over-dependence on exports, especially with respect to primary commodities, making these economies vulnerable to changes in commodity prices; overburdened infrastructure and obsolete or unseasoned financial systems; environmental problems; less developed legal systems; and less reliable custodial services and settlement practices.

NOTE 11 — FEDERAL INCOME TAXES

The amount of distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations, which may differ from U.S. generally accepted accounting principles for investment companies. These book/tax differences may be either temporary or permanent. Permanent differences are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences are not reclassified.

Key differences include the treatment of short-term capital gains, foreign currency transactions, and wash sale deferrals. Distributions in excess of net investment income and/or net realized capital gains for tax purposes are reported as return of capital.

The following permanent tax differences have been reclassified as of December 31, 2009:


	Undistributed Net Investment Income		Accumulated Net Realized Gains/(Losses)
Strategic Allocation Conservative	$	6,442	$	(6,442	)
Strategic Allocation Growth		4,525		(4,525	)
Strategic Allocation Moderate		6,712		(6,712	)

Dividends paid by the Portfolios from net investment income and distributions of net realized short-term capital gains are, for federal income tax purposes, taxable as ordinary income to shareholders.

The tax composition of dividends and distributions to shareholders was as follows:


	Year Ended December 31, 2009				Year Ended December 31, 2008
	Ordinary Income		Long-Term Capital Gains		Ordinary Income		Long-Term Capital Gains
Strategic Allocation Conservative	$	7,328,963	$	—	$	8,096,981	$	6,441,002
Strategic Allocation Growth		15,499,554		8,485,130		11,659,701		23,273,446
Strategic Allocation Moderate		14,471,197		4,793,412		13,352,069		19,502,697

The tax-basis components of distributable earnings and the expiration dates of the capital loss carryforwards which may be used to offset future realized capital gains for federal income tax purposes as of December 31, 2009 were:


	Undistributed Ordinary Income		Unrealized Appreciation/ (Depreciation)			Capital Loss Carryforwards			Expiration Dates
Strategic Allocation Conservative	$	4,335,805	$	(8,915,505	)	$	(710,796	)	2016
							(12,513,320	)	2017

						$	(13,224,116	)

Strategic Allocation Growth		6,188,625		(24,909,518	)		(34,617,751	)	2017
Strategic Allocation Moderate		6,816,339		(20,839,061	)		(30,535,699	)	2017

The Portfolios’ major tax jurisdictions are federal and Arizona. The earliest tax year that remains subject to examination by these jurisdictions is 2005.

NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2009 (CONTINUED)

NOTE 11 — FEDERAL INCOME TAXES (continued)

As of December 31, 2009, no provisions for income tax are required in the Portfolios’ financial statements as a result of tax positions taken on federal and state income tax returns for open tax years. The Portfolios’ federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state department of revenue.

NOTE 12 — SUBSEQUENT EVENTS

The Portfolios have evaluated events occurring after the Statements of Assets and Liabilities date (subsequent events) through February 25, 2010, the date the financial statements were issued, to determine whether any subsequent events necessitated adjustment to or disclosure in the financial statements. No such subsequent events were identified.

ING STRATEGIC ALLOCATION
CONSERVATIVE PORTFOLIO

PORTFOLIO OF INVESTMENTS

AS OF DECEMBER 31, 2009


Shares			Value
AFFILIATED INVESTMENT COMPANIES: 95.0%
420,902		ING Clarion Global Real Estate Portfolio - Class I	$	3,897,557
489,879		ING Growth and Income Portfolio - Class I		9,513,451
4,113,883		ING Intermediate Bond Portfolio - Class I		47,597,631
1,526,518	@	ING International Index Portfolio - Class I		12,532,712
421,858		ING MidCap Opportunities Portfolio - Class I		3,809,378
257,392		ING Small Company Portfolio - Class I		3,814,544
1,169,942		ING Tactical Asset Allocation Fund - Class I		9,535,030

		Total Investments in Affiliated Investment Companies (Cost $95,203,503)		90,700,303


Shares				Value
SHORT-TERM INVESTMENTS: 5.0%
	Affiliated Mutual Fund: 5.0%
4,762,049	ING Institutional Prime Money Market Fund - Class I			$	4,762,049

	Total Short-Term Investments (Cost $4,762,049)				4,762,049

	Total Investments in Affiliated Investment Companies (Cost $99,965,552)*	100.0	%	$	95,462,352
	Other Assets and Liabilities - Net	(0.0	)		(38,984	)

	Net Assets	100.0	%	$	95,423,368

@	Non-income producing security.

*	Cost for federal income tax purposes is $104,378,229.


Net unrealized depreciation consists of:
Gross Unrealized Appreciation	$	1,648,682
Gross Unrealized Depreciation		(10,564,559	)

Net Unrealized Depreciation	$	(8,915,877	)

Fair Value Measurements^

The following is a summary of the fair valuations according to the inputs used as of December 31, 2009 in valuing the Portfolio’s assets and liabilities:


	Quoted Prices in Active Markets for Identical Investments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value at 12/31/2009
Asset Table
Investments, at value
Affiliated Investment Companies	$	90,700,303	$	—	$	—	$	90,700,303
Short-Term Investments		4,762,049		—		—		4,762,049

Total Investments, at value	$	95,462,352	$	—	$	—	$	95,462,352

^ See Note 2, “Significant Accounting Policies” in the Notes to Financial Statements for additional information.

See Accompanying Notes to Financial Statements

ING STRATEGIC ALLOCATION
GROWTH PORTFOLIO

PORTFOLIO OF INVESTMENTS

AS OF DECEMBER 31, 2009


Shares			Value
AFFILIATED INVESTMENT COMPANIES: 98.0%
934,268		ING Clarion Global Real Estate Portfolio - Class I	$	8,651,319
1,913,540		ING Growth and Income Portfolio - Class I		37,160,937
1,899,185		ING Intermediate Bond Portfolio - Class I		21,973,571
5,212,623	@	ING International Index Portfolio - Class I		42,795,635
1,685,284		ING MidCap Opportunities Portfolio - Class I		15,218,111
1,028,253		ING Small Company Portfolio - Class I		15,238,708
3,115,926		ING Tactical Asset Allocation Fund - Class I		25,394,798

		Total Investments in Affiliated Investment Companies (Cost $180,226,988)		166,433,079


Shares				Value
SHORT-TERM INVESTMENTS: 2.0%
	Affiliated Mutual Fund: 2.0%
3,382,186	ING Institutional Prime Money Market Fund - Class I			$	3,382,186

	Total Short-Term Investments (Cost $3,382,186)				3,382,186

	Total Investments in Affiliated Investment Companies (Cost $183,609,174)*	100.0	%	$	169,815,265
	Other Assets and Liabilities - Net	(0.0	)		(28,502	)

	Net Assets	100.0	%	$	169,786,763

@	Non-income producing security.

*	Cost for federal income tax purposes is $194,730,081.


Net unrealized depreciation consists of:
Gross Unrealized Appreciation	$	6,306,875
Gross Unrealized Depreciation		(31,221,691	)

Net Unrealized Depreciation	$	(24,914,816	)

Fair Value Measurements^

The following is a summary of the fair valuations according to the inputs used as of December 31, 2009 in valuing the Portfolio’s assets and liabilities:


	Quoted Prices in Active Markets for Identical Investments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value at 12/31/2009
Asset Table
Investments, at value
Affiliated Investment Companies	$	166,433,079	$	—	$	—	$	166,433,079
Short-Term Investments		3,382,186		—		—		3,382,186

Total Investments, at value	$	169,815,265	$	—	$	—	$	169,815,265

^ See Note 2, “Significant Accounting Policies” in the Notes to Financial Statements for additional information.

See Accompanying Notes to Financial Statements

ING STRATEGIC ALLOCATION MODERATE
PORTFOLIO

PORTFOLIO OF INVESTMENTS

AS OF DECEMBER 31, 2009


Shares			Value

AFFILIATED INVESTMENT COMPANIES: 97.0%
931,584		ING Clarion Global Real Estate Portfolio - Class I	$	8,626,470
1,127,554		ING Growth and Income Portfolio - Class I		21,897,096
4,661,861		ING Intermediate Bond Portfolio - Class I		53,937,730
4,158,237	@	ING International Index Portfolio - Class I		34,139,122
1,120,365		ING MidCap Opportunities Portfolio - Class I		10,116,895
683,572		ING Small Company Portfolio - Class I		10,130,531
3,107,170		ING Tactical Asset Allocation Fund - Class I		25,323,435

		Total Investments in Affiliated Investment Companies (Cost $175,660,138)		164,171,279


Shares				Value
SHORT-TERM INVESTMENTS: 3.0%
	Affiliated Mutual Fund: 3.0%
5,059,083	ING Institutional Prime Money Market Fund - Class I			$	5,059,083

	Total Short-Term Investments (Cost $5,059,083)				5,059,083

	Total Investments in Affiliated Investment Companies (Cost $180,719,221) *	100.0	%	$	169,230,362
	Other Assets and Liabilities - Net	(0.0	)		(77,773	)

	Net Assets	100.0	%	$	169,152,589

@	Non-income producing security.

*	Cost for federal income tax purposes is $190,069,765.


Net unrealized depreciation consists of:
Gross Unrealized Appreciation	$	4,011,955
Gross Unrealized Depreciation		(24,851,358	)

Net Unrealized Depreciation	$	(20,839,403	)

Fair Value Measurements^

The following is a summary of the fair valuations according to the inputs used as of December 31, 2009 in valuing the Portfolio’s assets and liabilities:


	Quoted Prices in Active Markets for Identical Investments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value at 12/31/2009
Asset Table
Investments, at value
Affiliated Investment Companies	$	164,171,279	$	—	$	—	$	164,171,279
Short-Term Investments		5,059,083		—		—		5,059,083

Total Investments, at value	$	169,230,362	$	—	$	—	$	169,230,362

^ See Note 2, “Significant Accounting Policies” in the Notes to Financial Statements for additional information.

See Accompanying Notes to Financial Statements

TAX INFORMATION (UNAUDITED)

Dividends paid during the year ended December 31, 2009 were as follows:


Fund Name	Type	Per Share Amount

ING Strategic Allocation Conservative Portfolio
Class ADV	NII	$	0.7551
Class I	NII	$	0.8057
Class S	NII	$	0.7795

ING Strategic Allocation Growth Portfolio
Class ADV	NII	$	0.9223
Class I	NII	$	0.9740
Class S	NII	$	0.9496
All Classes	LTCG	$	0.5331

ING Strategic Allocation Moderate Portfolio
Class ADV	NII	$	0.8578
Class I	NII	$	0.9056
Class S	NII	$	0.8811
All Classes	LTCG	$	0.2999

NII - Net investment income

LTCG - Long-term capital gain

Of the ordinary distributions made during the year ended December 31, 2009, the following percentages

qualify for the dividends received deduction (DRD) available to corporate shareholders:



ING Strategic Allocation Conservative Portfolio	4.00	%

ING Strategic Allocation Growth Portfolio	6.05	%

ING Strategic Allocation Moderate Portfolio	5.98	%

Above figures may differ from those cited elsewhere in this report due to differences in the calculation of income and gains under U.S. generally accepted accounting principles (book) purposes and Internal Revenue Service (tax) purposes.

Shareholders are strongly advised to consult their own tax advisers with respect to the tax consequences of their investments in the Portfolios. In January, shareholders, excluding corporate shareholders, receive an IRS 1099-DIV regarding the federal tax status of the dividends and distributions they received in the calendar year.

DIRECTOR AND OFFICER INFORMATION (UNAUDITED)

The business and affairs of the Company are managed under the direction of the Board. A Director who is not an interested person of the Company, as defined in the 1940 Act, is an independent director (“Non-Interested Director”). The Directors of the Portfolios are listed below. The Statement of Additional Information includes additional information about Directors of the Company and is available, without charge, upon request at (800) 992-0180.


Name, Address and Age	Position(s) held with the Company	Term of Office and Length of Time Served⁽¹⁾	Principal Occupation(s) During the Past Five Years	Number of Portfolios in Fund Complex Overseen by Director⁽²⁾	Other Directorships Held by Director
Independent Directors:

Albert E. DePrince, Jr. 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 68	Director	June 1998 - Present	Professor of Economics and Finance, Middle Tennessee State University (August 1991 - Present).	42	Academy of Economics and Finance (February 2002 - Present).

Sidney Koch 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 74	Director	April 1994 - Present	Retired. Self-Employed Consultant (June 2000 - Present).	42	None.

Corine T. Norgaard 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 72	Director	June 1991 - Present	President, Retirement Options, LLC, a training provider for retirement coaches (August 2009 - Present). Formerly, President, Thompson Enterprises (September 2004 - September 2005).	42	MassMutual Corporate Investors and MassMutual Participation Investors (April 1997 - Present); Mass Mutual Premier Funds (December 2004 - Present); and MML Series Investment Funds II (December 2005 - Present).

Joseph E. Obermeyer 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 52	Director	January 2003 - Present	President, Obermeyer & Associates, Inc., a provider of financial and economic consulting services (November 1999 - Present).	42	None.

Russell Jones 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 65	Director	December 2007 - Present	Retired. Formerly, Senior Vice President, Chief Investment Officer and Treasurer, Kaman Corporation, an aerospace and industrial distribution manufacturer (April 1973 - March 2008)	42	None.

Martin Gavin 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona Age: 59	Director	January 2009 - Present	President, Connecticut Children’s Medical Center (May 2006 - Present). Formerly, Interim President, Connecticut Children’s Medical Center (January 2006 - May 2006).	42	None.
Directors who are “Interested Persons”

Shaun Mathews⁽³⁾⁽⁴⁾ 7337 E. Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 54	Director	December 2007 - Present	President and Chief Executive Officer, ING Investments, LLC⁽⁵⁾ (November 2006 - Present). Formerly, President, ING Mutual Funds and Investment Products (November 2004 - November 2006)	178	ING Services Holding Company, Inc. (May 2000 - Present); Southland Life Insurance Company (June 2002 - Present); and ING Capital Corporation, LLC, ING Funds Distributor, LLC⁽⁶⁾, ING Funds Services, LLC⁽⁷⁾, ING Investments, LLC⁽⁵⁾ and ING Pilgrim Funding, Inc. (December 2006 - Present).

⁽¹⁾

Directors/Trustees serve until their successors are duly elected and qualified.

⁽²⁾

For the purposes of this table (except for Mr. Mathews), “Fund Complex” means the following investment companies: ING Series Fund, Inc.; ING Strategic Allocation Portfolios, Inc.; ING Variable Funds; ING Variable Portfolios, Inc.; ING Balanced Portfolio, Inc.; ING Intermediate Bond Portfolio; and ING Money Market Portfolio.

⁽³⁾

For Mr. Mathews, the Fund Complex also includes the following investment companies: ING Asia Pacific High Dividend Equity Income Fund, ING Equity Trust; ING Funds Trust; ING Global Equity Dividend and Premium Opportunity Fund; ING Global Advantage and Premium Opportunity Fund; ING Infrastructure, Industrials, and Materials Fund; ING International High Dividend Equity Income Fund; ING Investors Trust; ING Mayflower Trust; ING Mutual Funds; ING Partners, Inc.; ING Prime Rate Trust; ING Risk Managed Natural Resources Fund; ING Senior Income Fund; ING Separate Portfolios Trust; ING Variable Insurance Trust; and ING Variable Products Trust.

DIRECTOR AND OFFICER INFORMATION (UNAUDITED) (CONTINUED)

⁽⁴⁾

“Interested person,” as defined in the 1940 Act, by virtue of this Director’s/Trustee’s affiliation with any of the Funds, ING or any of ING’s affiliates.

⁽⁵⁾

ING Investments, LLC was previously named ING Pilgrim Investments, LLC. ING Pilgrim Investments, LLC is the successor in interest to ING Pilgrim Investments, Inc., which was previously known as Pilgrim Investments, Inc. and before that was known as Pilgrim America Investments, Inc.

⁽⁶⁾

ING Funds Distributor, LLC is the successor in interest to ING Funds Distributor, Inc., which was previously known as ING Pilgrim Securities, Inc., and before that was known as Pilgrim Securities, Inc., and before that was known as Pilgrim America Securities, Inc.

⁽⁷⁾

ING Funds Services, LLC was previously named ING Pilgrim Group, LLC. ING Pilgrim Group, LLC is the successor in interest to ING Pilgrim Group, Inc., which was previously known as Pilgrim Group, Inc. and before that was known as Pilgrim America Group, Inc.

DIRECTOR AND OFFICER INFORMATION (UNAUDITED) (CONTINUED)


Name, Address and Age	Position(s) Held With Company	Term of Office and Length of Time Served⁽¹⁾	Principal Occupation(s) During the Past Five Years
Officers:

Shaun P. Mathews⁽⁵⁾ 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 54	President and Chief Executive Officer	December 2006 - Present	President and Chief Executive Officer, ING Investments, LLC (November 2006 - Present). Formerly, President, ING Mutual Funds and Investment Products (November 2004 - November 2006)

Michael J. Roland 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 51	Executive Vice President	April 2002 - Present	Head of Mutual Fund Platform (February 2007 - Present) and Executive Vice President, ING Investments, LLC⁽²⁾ and ING Funds Services, LLC⁽³⁾ (December 2001 - Present). Formerly, Executive Vice President, Head of Product Management (January 2005 - January 2007); Chief Compliance Officer, ING Investments, LLC⁽²⁾ and Directed Services LLC⁽⁶⁾ (October 2004 - December 2005); and Chief Financial Officer and Treasurer, ING Investments, LLC⁽²⁾ (December 2001 - March 2005).

Stanley D. Vyner 230 Park Avenue New York, New York 10169 Age: 59	Executive Vice President	March 2002 - Present	Executive Vice President, ING Investments, LLC⁽²⁾ (July 2000 - Present) and Chief Investment Risk Officer, ING Investments, LLC⁽²⁾ (January 2003 - Present).

Joseph M. O’Donnell 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 55	Executive Vice President and Chief Compliance Officer	March 2006 - Present November 2004 - Present	Chief Compliance Officer of the ING Funds (November 2004 - Present); Executive Vice President of the ING Funds (March 2006 - Present); Chief Compliance Officer of ING Investments, LLC⁽²⁾ (March 2006 - July 2008 and October 2009 - Present); and Investment Advisor Chief Compliance Officer, Directed Services LLC⁽⁶⁾ (March 2006 - July 2008 and October 2009 - Present). Formerly, Investment Advisor Chief Compliance Officer, ING Life Insurance and Annuity Company (March 2006 - December 2006).

Todd Modic 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 42	Senior Vice President, Chief/Principal Financial Officer and Assistant Secretary	March 2005 - Present	Senior Vice President, ING Funds Services, LLC⁽³⁾ (March 2005 - Present). Formerly, Vice President, ING Funds Services, LLC⁽³⁾ (September 2002 - March 2005).

Kimberly A. Anderson 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 45	Senior Vice President	December 2003 - Present	Senior Vice President, ING Investments, LLC⁽²⁾ (October 2003 - Present).

Robert Terris 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 39	Senior Vice President	June 2006 - Present	Senior Vice President, Head of Division Operations, ING Funds Services, LLC⁽³⁾ (May 2006 - Present). Formerly, Vice President of Administration, ING Funds Services, LLC⁽³⁾ (October 2001 - March 2006).

Robyn L. Ichilov 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 42	Vice President and Treasurer	March 2002 - Present	Vice President and Treasurer, ING Funds Services, LLC⁽³⁾(November 1995 - Present) and ING Investments, LLC⁽²⁾(August 1997 - Present).

Lauren D. Bensinger 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 55	Vice President	March 2003 - Present	Vice President and Chief Compliance Officer, ING Funds Distributor, LLC⁽⁴⁾ (August 1995 - Present); Vice President, ING Investments, LLC⁽²⁾ and ING Funds Services, LLC⁽³⁾ (February 1996 - Present); and Director of Compliance, ING Investments, LLC⁽²⁾ (October 2004 - Present).

William Evans 10 State House Square Hartford, Ct 06103 Age: 37	Vice President	September 2007 - Present	Vice President, Head of Manager, Research and Selection Group (April 2007 - Present). Formerly, Vice President, U.S. Mutual Funds and Investment Products (May 2005 - April 2007) and Senior Fund Analyst, U.S. Mutual Funds and Investment Products (May 2002 - May 2005).

Maria M. Anderson 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 51	Vice President	September 2004 - Present	Vice President, ING Funds Services, LLC⁽³⁾ (September 2004 - Present).

Denise Lewis 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 46	Vice President	April 2007 - Present	Vice President, ING Funds Services, LLC (December 2006 - Present). Formerly, Senior Vice President, UMB Investment Services Group, LLC (November 2003 - December 2006).

Kimberly K. Springer 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 52	Vice President	March 2006 - Present	Vice President, ING Funds Services, LLC⁽³⁾ (March 2006 - Present). Formerly, Assistant Vice President, ING Funds Services, LLC⁽³⁾ (August 2004 - March 2006).

DIRECTOR AND OFFICER INFORMATION (UNAUDITED) (CONTINUED)


Name, Address and Age	Position(s) Held With Company	Term of Office and Length of Time Served⁽¹⁾	Principal Occupation(s) During the Past Five Years

Craig Wheeler 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 40	Assistant Vice President	June 2008 - Present	Assistant Vice President - Director of Tax, ING Funds Services (March 2008 - Present). Formerly, Tax Manager, ING Funds Services (March 2005 - March 2008); and Tax Senior , ING Funds Services (January 2004 - March 2005).

Huey P. Falgout, Jr. 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 46	Assistant Secretary	September 2003 - Present	Chief Counsel, ING Americas, U.S. Legal Services (September 2003 - Present).

Theresa K. Kelety 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 46	Secretary	September 2003 - Present	Senior Counsel, ING Americas, U.S. Legal Services (April 2008 - Present). Formerly, Counsel, ING Americas, U.S. Legal Services (April 2003 - April 2008).

Kathleen Nichols 7337 East Doubletree Ranch Rd. Scottsdale, Arizona 85258 Age: 34	Assistant Secretary	June 2008 - Present	Counsel, ING Americas, U.S. Legal Services (February 2008 - Present). Formerly, Associate, Ropes & Gray LLP (September 2005 - February 2008)

⁽¹⁾

The officers hold office until the next annual meeting of the Trustees and until their successors shall have been elected and qualified.

⁽²⁾

⁽³⁾

⁽⁴⁾

⁽⁵⁾

Mr. Mathews commenced services as CEO and President of the ING Funds on November 11, 2006.

⁽⁶⁾

Directed Services LLC is the successor in interest to Directed Services, Inc.

ADVISORY CONTRACT APPROVAL DISCUSSION (UNAUDITED)

BOARD CONSIDERATION AND APPROVAL OF INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS

The Investment Company Act of 1940, as amended (the “1940 Act”), provides, in substance, that each investment advisory agreement and sub-advisory agreement for a mutual fund will terminate automatically after the initial term of the agreement (which term may not exceed two years), unless continuation of the agreement is approved annually by the Board of Trustees or Directors, as the case may be (the “Board”) of the fund, including a majority of the Trustees/Directors who have no direct or indirect interest in the agreement and who are not “interested persons” of the fund (the “Independent Trustees”). Consistent with this requirement of the 1940 Act, the Board of ING Balanced Portfolio, Inc., ING Strategic Allocation Portfolios, Inc., ING Intermediate Bond Portfolio, ING Money Market Portfolio, ING Variable Funds, ING Variable Portfolios, Inc. and ING Series Fund, Inc., with respect to each portfolio series thereof (each, a “Fund” and, collectively, the “Funds”) has established a process for considering on an annual basis approval of the continuation of the Investment Management Agreement for each Fund (the “Advisory Agreement”) with ING Investments, LLC (the “Adviser”) and the sub-advisory agreement for each Fund (collectively, the “Sub-Advisory Agreements”) with each sub-adviser of the Funds (the “Sub-Advisers”). Set forth below is a description of the process followed by the Board in considering approval of the continuation of each Advisory and Sub-Advisory Agreement (collectively, the “Agreements”), together with an explanation of many of the factors considered and related conclusions reached by the Board in voting to approve the continuation of each Agreement for an additional one-year period commencing January 1, 2010, followed by specific considerations with respect to each Fund covered by this report (each, a “Portfolio”).

Overview of the Review Process

At a meeting of the Board held on December 16, 2009, the Board, including all of the Independent Trustees, voted to approve continuation of each of the existing Advisory and Sub-Advisory Agreements for the Funds. Prior to voting such approvals, the Board received the affirmative recommendation of the Contracts Committee of the Board, which is a Committee of the Board comprised of all of the Independent Trustees and exclusively of the Independent Trustees. The Contracts Committee recommended approval of the Advisory and

Sub-Advisory Agreements after completing an extensive review of information requested by the Committee from the Adviser and each Sub-Adviser, including the following: (1) comparative performance data for each Fund for various time periods; (2) comparative data regarding management fees, including data regarding the fees charged by the Adviser and Sub-Advisers for managing other mutual funds and institutional accounts using investment strategies and techniques similar to those used in managing the Funds; (3) comparative data regarding the total expenses of each Fund; (4) copies of each form of Advisory Agreement and Sub-Advisory Agreement; (5) copies of the codes of ethics of the Adviser and each Sub-Adviser, together with information relating to the manner in which each code is administered; (6) financial statements of the Adviser and each Sub-Adviser; (7) profitability analyses for the Adviser and each Sub-Adviser with respect to each Fund, and all Funds as a group; (8) descriptions of the qualifications of the investment personnel responsible for managing each Fund, the structure of their compensation and their responsibilities with respect to managing other accounts or mutual funds; (9) descriptions of the services provided to the Funds, including the investment strategies and techniques used by each Sub-Adviser in managing the Funds; (10) data relating to portfolio turnover and brokerage practices, including practices with respect to the acquisition of research through “soft dollar” benefits received in connection with the Funds’ brokerage; (11) data comparing the performance of certain Funds against “static portfolios” of the Funds over various time periods; (12) descriptions of the policies and procedures of the various service providers of the Funds for protecting the privacy of shareholder information; (13) information relating to projected sales and redemptions of Fund shares and business plans relating to the Adviser’s mutual fund platform; (14) descriptions of the business continuity and disaster recovery plans of the Adviser and each Sub-Adviser; (15) descriptions of various compliance programs of the Adviser and Sub-Advisers, including the Adviser’s programs for monitoring and enforcing compliance with the Funds’ policies with respect to market-timing, late trading and selective portfolio disclosure; (16) independent reports analyzing the quality of the trade execution services performed by Sub-Advisers for the Funds; and (17) other information relevant to an evaluation of the nature, extent and quality of the services provided by the Adviser and each Sub-Adviser in response to a series of detailed questions posed by Goodwin Procter LLP, legal counsel for the

ADVISORY CONTRACT APPROVAL DISCUSSION (UNAUDITED) (CONTINUED)

Independent Trustees (“Independent Counsel”) on behalf of the Independent Trustees.

The Contracts Committee began the formal review process in July 2009 when it met separately with Independent Counsel, to review the information to be requested from management and the methodology to be used in determining the selected peer groups for comparing performance and expenses (the “Peer Group Methodology”). Prior to the July meeting, the Contracts Committee engaged an independent consultant (the “Independent Consultant”) to evaluate, and make recommendations with respect to, the Peer Group Methodolgy. The Independent Consultant’s findings were reported to the Contracts Committee at the July meeting and incorporated into the Peer Group Methodology approved by the Board. The Contracts Committee then held meetings on October 14-15, 2009 and December 14-15, 2009, during which the Independent Trustees, meeting separately with Independent Counsel, reviewed and evaluated the information described above. As part of the review process, the Contracts Committee also met with representatives from the Adviser and/or the Sub-Advisers to discuss the information provided to the Committee. The Contracts Committee also considered information that had been provided by the Adviser and Sub-Advisers throughout the year at other meetings of the Contracts Committee, the Audit Committee, the Compliance Committee and the full Board.

The Independent Trustees were assisted by Independent Counsel, throughout the contract review process. The Independent Trustees relied upon the advice of Independent Counsel and their own business judgment in determining the material factors to be considered in evaluating each Advisory and Sub-Advisory Agreement and the weight to be given to each such factor. The conclusions reached by the Independent Trustees were based on a comprehensive evaluation of all of the information provided and were not the result of any one factor. Moreover, each Independent Trustee may have afforded different weight to the various factors in reaching his or her conclusions with respect to each Advisory and Sub-Advisory Agreement.

Nature, Extent and Quality of Services

In considering whether to approve the Advisory and Sub-Advisory Agreements for the Funds for the year commencing January 1, 2010, the Board evaluated the nature, extent and quality of services provided to the Funds by the Adviser and Sub-Advisers. The Board

considered the investment management and related services provided by the Adviser and Sub-Advisers, including the quantity and quality of the resources available to provide such services. Among other things, the Board considered the qualifications of the individuals responsible for performing various investment related services.

The Board also considered the quality of the compliance programs of the Adviser and each Sub-Adviser, including the manner in which the Adviser and each Sub-Adviser monitor for compliance with the investment policies and restrictions of a Fund and with the Codes of Ethics of the Funds, the Adviser and the Sub-Advisers with respect to personal trading by employees with access to portfolio information. The Board also considered the actions taken by the Adviser and Sub-Advisers to establish and maintain effective disaster recovery and business continuity plans.

The Board considered the actions taken by the Adviser and its affiliated companies to administer the Funds’ policies and procedures for voting proxies, valuing the Funds’ assets, selective disclosure of portfolio holdings and preventing late-trading and frequent trading of Fund shares.

The Board also took into account the efforts of the Adviser and its affiliated companies to reduce the expenses of the Funds. With respect to those Funds that are sub-advised by an affiliate of the Adviser, the Board specifically noted that, in recent years, the Adviser and its affiliated companies have significantly reduced the Funds’ brokerage costs and portfolio turnover rates, as well as the quantity of research acquired through the use of soft dollars from the Funds’ brokerage. The Board also noted the efforts of the Adviser to optimize the number of Funds in the ING complex of mutual funds and to standardize the asset management characteristics and policies across the ING mutual fund platform. The Board considered information provided by management with respect to initiatives underway within ING Groep to establish an integrated global asset management firm (the “Global Transition”) that is expected to provide the benefits of centralized and collaborative operations to ING’s asset management business and may result in operational efficiencies that will benefit the Funds and shareholders of the Funds. The Board also considered the actions that have been taken by management to retain key investment management personnel during the Global Transition. The Board also considered the benefits that shareholders of the Funds realize because the Funds are part of a larger ING family of mutual funds, including,

ADVISORY CONTRACT APPROVAL DISCUSSION (UNAUDITED) (CONTINUED)

in most cases, the ability of shareholders to exchange or transfer investments within the same class of shares among a wide variety of mutual funds without incurring additional sales charges. In that regard, the Board considered the potential impacts of any divestiture of its insurance business, which includes the investment management businesses, by ING Groep or significant change in structure of the investment management business, if any, on the services provided to the Funds by the Adviser and Sub-Advisers.

The Board also considered the Adviser’s responsiveness and recommendations for Board action and other steps taken in response to the extraordinary dislocations experienced in the capital markets over recent periods, including sustained periods of high volatility, credit disruption and government intervention. In particular, the Board considered the Adviser’s efforts and expertise with respect to each of the following matters as they relate to the Funds: (i) negotiating and maintaining the availability of bank loan facilities and other sources of credit used to satisfy liquidity needs; (ii) establishing the fair value of securities and other instruments held in investment portfolios during periods of market volatility and issuer-specific disruptions; (iii) negotiating credit support from the Funds’ securities lending agent with respect to certain defaulted securities held indirectly by the Funds as collateral for securities on loan; and (iv) the ongoing monitoring of investment management processes and risk controls.

The Board’s approval of the Advisory and Sub-Advisory Agreements was informed by certain information provided by the Advisor and the applicable Sub-Advisers with respect to certain actions to be taken to correct underperformance and lack of scale with respect to certain Funds as indicated in the Portfolio-by-Portfolio analysis below.

The Board concluded that the nature, extent and quality of advisory and related services provided by the Adviser and each of the Sub-Advisers, taken as a whole, are consistent with the terms of the respective Advisory and Sub-Advisory Agreements and justify the fees paid by the Funds for such services.

Fund Performance

The Board reviewed each Fund’s investment performance over various time periods on an absolute basis and relative to the performance of (i) one or more appropriate benchmark indexes (such as the S&P 500 Composite Stock Price Index), (ii) a group of similarly managed mutual funds identified by Lipper, Inc. and/or

Morningstar, Inc., and (iii) similarly managed mutual funds within a specified peer group based upon the Peer Group Methodology approved by the Contracts Committee (each, a “Selected Peer Group”). The Board reviewed comparative performance data for the most recent calendar quarter, year-to-date, one-, three-, five- and ten-year periods, where applicable, ending June 30, 2009 and the most recent calendar quarter, year-to-date, one-, three-, and five-year periods ending September 30, 2009. In considering the performance of the Funds, the Board noted the extraordinary period of high volatility during the prior two years and the response of the Adviser and each Sub-Adviser to such volatility. Summaries of selected portions of the performance information reviewed by the Board, together with the Board’s conclusions regarding the performance of each Portfolio, are set forth below under “Portfolio-by-Portfolio Analysis.”

Management Fees, Sub-Advisory Fees and Expenses

Consideration was given to the contractual investment advisory fee rates, inclusive of administrative fee rates, payable by the Funds to the Adviser and its affiliated companies (referred to collectively as “management fees”) and the contractual sub-advisory fee rates payable by the Adviser to each Sub-Adviser for sub-advisory services. As part of its review, the Board considered each Fund’s management fee and total expense ratio, as compared to its Selected Peer Group, both before and after giving effect to any undertaking by the Adviser to waive fees and/or limit the total expenses of a Fund. In addition, the Trustees received information regarding the fees charged by each Sub-Adviser to similarly-managed institutional accounts and other mutual funds, if any, and the comparability (or lack thereof) of the services provided by the Sub-Adviser in managing such accounts and other mutual funds to the services provided in managing the Funds. With respect to the Funds sub-advised by an affiliate of the Adviser, the Board evaluated the reasonableness of the total fees received by the Adviser and its affiliate in the aggregate under the Advisory and Sub-Advisory Agreements. With respect to those Funds sub-advised by a Sub-Adviser that is not affiliated with the Adviser, the Board considered the reasonableness of the fees payable to the Sub-Adviser by the Adviser in light of the ability of the Adviser to negotiate such fees on an arm’s-length basis. Summaries of selected portions of the fee and expense information reviewed with respect to each Portfolio are set forth below under “Portfolio-by-Portfolio Analysis.” After reviewing the foregoing

ADVISORY CONTRACT APPROVAL DISCUSSION (UNAUDITED) (CONTINUED)

information, and in light of the nature, extent and quality of the services provided by the Adviser and each Sub-Adviser, the Board concluded with respect to each Fund that the management fee charged to the Fund for advisory, sub-advisory and related services is fair and reasonable and that the total expense ratio of the Fund is reasonable.

Profitability

The Board considered information relating to revenues, expenses, and profits realized by the Adviser and each Sub-Adviser attributable to performing advisory, sub-advisory and administrative services for the Funds. With respect to Funds sub-advised by an unaffiliated Sub-Adviser, the Board did not consider the profitability of the Sub-Adviser to be a material factor because the Board believes that the Adviser negotiates sub-advisory fees with the unaffiliated Sub-Adviser on an arm’s-length basis. The Board reviewed profitability data for the Adviser and its affiliated companies, including the distributor of the Funds, relating to (i) each Fund separately, (ii) all Funds as a group, (iii) all “retail” Funds as a group, and (iv) all variable insurance product Funds as a group, in each case for the one-year periods ended December 31, 2008 and December 31, 2007 and the nine-month period ended September 30, 2009. With respect to the Adviser and its affiliates, such information was prepared in accordance with a methodology approved by the Contracts Committee. The Board considered the profitability of the Adviser and its affiliated companies attributable to managing and operating each Fund both with and without the profitability of the distributor of the Funds and both before and after giving effect to any expenses incurred by the Adviser or any affiliated company in making revenue sharing or other payments to third parties, including affiliated insurance companies, for distribution and administrative services. With respect to Funds sub-advised by an affiliate of the Adviser, the Board considered the total profits derived by the Adviser and its affiliate in the aggregate attributable to managing and operating each Fund. The Board also considered other direct or indirect benefits that the Adviser and Sub-Advisers, and any affiliated companies thereof, derive from their relationships with the Funds, including the receipt by certain affiliates of the Adviser, of fees relating to the offering of bundled financial products, such as annuity contracts, and the receipt by Sub-Advisers of “soft dollar” benefits from the Funds’ brokerage. The Board concluded that, in light of the nature, extent and quality of the services provided, the profits realized by the Adviser and its affiliated

companies, individually and taken as a whole, with respect to providing advisory, sub-advisory and administrative services for each Fund are reasonable.

Economies of Scale

In considering the reasonableness of the management fee of each Fund, the Board considered the extent to which economies of scale can be expected to be realized by a Fund’s Adviser and its affiliated companies, on the one hand, and by the Fund, on the other hand, as the assets of the Fund increase. The Board noted that the advisory fee schedule for certain Funds includes breakpoints such that, as the assets of the Fund increase, the Fund’s management fee will decrease as a percentage of the Fund’s total assets. The Board recognized the inherent difficulties in measuring precisely the impact of any economies of scale being realized by the Adviser and its affiliated companies with respect to their management of any one or more Funds. In an effort to determine the extent to which economies of scale, if any, will be realized by the Adviser and its affiliated companies as the assets of the Funds grow, the Board considered the profitability data described above relating to the Adviser and its affiliated companies in light of changes in the assets of the Funds over various time periods. The Board noted that the total assets under management of many of the Funds have decreased during the past several years and concluded that the economies of scale realized by the Adviser and its affiliated companies from managing the Funds have not increased with respect to such Funds. The Board also reviewed information regarding the expense ratio of each Fund in light of changes in the assets of the Funds over various time periods, noting that, as the assets of a Fund increase, the fixed expenses of the Fund, as a percentage of the total assets of the Fund, can be expected to decrease. The Board considered such expense information in light of projections provided by the Adviser with respect to the future growth of assets of the Funds. The Board also considered the extent to which economies of scale are expected to be realized as a result of the Global Transition. Based upon the foregoing, the Board concluded that the economies of scale being realized by the Adviser and its affiliated companies do not mandate the implementation of breakpoints or additional breakpoints, as the case may be, with respect to any Fund at this time.

Portfolio-by-Portfolio Analysis

In deciding to approve the continuation of each Advisory and Sub-Advisory Agreement for an

ADVISORY CONTRACT APPROVAL DISCUSSION (UNAUDITED) (CONTINUED)

additional one-year period beginning January 1, 2010, the Board took into account the specific data and factors identified below relating to the performance, fees and expenses of each Fund and actions being taken by the Adviser or Sub-Adviser, as the case may be, with respect to these matters. Except as otherwise indicated, the performance data described below for each Portfolio is for periods ended September 30, 2009 and the management fees and expense data described below are as of June 30, 2009.

ING Strategic Allocation Conservative Portfolio

In evaluating the investment performance of ING Strategic Allocation Conservative Portfolio the Board noted that: (1) the Portfolio outperformed its Morningstar category median for the most recent calendar quarter but underperformed for the year-to-date, one-year, three-year and five-year periods; (2) the Portfolio outperformed its benchmark index for the most recent calendar quarter and year-to-date periods but underperformed for the one-year, three-year and five-year periods; and (3) the Portfolio is ranked in its Morningstar category in the first quintile for the most recent calendar quarter, in the fourth quintile for the year-to-date period and in the fifth quintile for the one-year, three year and five-year periods. The Board noted that the Portfolio has been operating as a risk-based fund-of-funds since April 7, 2008 and that in connection with the conversion to the risk-based funds-of-funds structure the Portfolio modified its exposures to certain asset categories, including real estate securities and international equities. The Board also noted that in late 2008, the Portfolio began investing in ING Tactical Asset Allocation Fund to adjust its exposures among various asset categories more efficiently in response to changing market conditions. Additionally, the Board also recognized that certain of the funds that serve as underlying investment options to the Portfolio have experienced significant turnover of their portfolio management teams during 2009, and either have implemented, or are expected to implement in early 2010, changes to their investment strategies to address their underperformance. Lastly, the Board also noted that management has represented to the Board that a full proposal relating to actions, which may include a reorganization or strategy change, to be taken to address the long-term viability of the Portfolio will be presented to the Board in the first part of 2010. The Board concluded that appropriate actions are being taken to improve the performance of the Portfolio and that additional time is needed to evaluate the effectiveness of these actions.

In assessing the reasonableness of the management fee and expense ratio for ING Strategic Allocation Conservative Portfolio, the Board noted that the management fee for the Portfolio is below the median and average management fees of the funds in its Selected Peer Group, and that the expense ratio for the Portfolio is below the median and average expense ratios of the funds in its Selected Peer Group.

ING Strategic Allocation Moderate Portfolio

In evaluating the investment performance of ING Strategic Allocation Moderate Portfolio, the Board noted that: (1) the Portfolio outperformed its Morningstar category median and benchmark index for the most recent calendar quarter but underperformed for the year-to-date, one-year, three-year and five-year periods; and (2) the Portfolio is ranked in its Morningstar category in the first quintile for the most recent calendar quarter, in the fourth quintile for the year-to-date, three-year and five-year periods and in the fifth quintile for the one-year period. The Board noted that the Portfolio has been operating as a risk-based fund-of-funds since April 7, 2008 and that in connection with the conversion to the risk-based fund-of-funds structure the Portfolio modified its exposures to certain asset categories, including real estate securities and international equities. The Board also noted that in late 2008 the Portfolio began investing in ING Tactical Asset Allocation Fund to adjust its exposures among various asset categories more efficiently in response to changing market conditions. Additionally, the Board recognized that certain of the funds that serve as underlying investment options to the Portfolio have experienced significant turnover of their portfolio management teams during 2009, and either have implemented, or are expected to implement, in early 2010, changes to their investment strategies to address their underperformance. Lastly, the Board also noted that management has represented to the Board that a full proposal relating to actions, which may include a reorganization or strategy change, to be taken to address the long-term viability of the Portfolio will be presented to the Board in the first part of 2010. The Board concluded that appropriate actions are being taken to improve the performance of the Portfolio and that additional time is needed to evaluate the effectiveness of these actions.

In assessing the reasonableness of the management fee and expense ratio for ING Strategic Allocation Moderate Portfolio, the Board noted that the management fee for the Portfolio is above the median and below the average management fees of the funds

ADVISORY CONTRACT APPROVAL DISCUSSION (UNAUDITED) (CONTINUED)

in its Selected Peer Group, and that the expense ratio for the Portfolio is below the median and average expense ratios of the funds in its Selected Peer Group.

ING Strategic Allocation Growth Portfolio

In evaluating the investment performance of ING Strategic Allocation Growth Portfolio, the Board noted that: (1) the Portfolio outperformed its Morningstar category median for the most recent calendar quarter, one-year, three-year and five-year periods but underperformed for the year-to-date period; (2) the Portfolio underperformed its benchmark index for all periods presented; and (3) the Portfolio is ranked in its Morningstar category in the second quintile for the most recent calendar quarter and one-year periods, and in the third quintile for the year-to-date, three-year and five-year periods. The Board noted that the Portfolio has been operating as a risk-based fund-of-funds since April 7, 2008 and that in connection with the conversion to the risk-based fund-of-funds structure the Portfolio modified its exposures to certain asset categories, including real estate securities and international equities. The Board also noted that in late 2008 the Portfolio began investing in ING Tactical Asset Allocation Fund to adjust its exposures among various asset categories more efficiently in response to

changing market conditions. Additionally, the Board recognized that certain of the funds that serve as underlying investment options to the Portfolio have experienced significant turnover of their portfolio management teams during 2009, and either have implemented, or are expected to implement, in early 2010, changes to their investment strategies to address their underperformance. Lastly, the Board also noted that management has represented to the Board that a full proposal relating to actions, which may include a reorganization or strategy change, to be taken to address the long-term viability of the Portfolio will be presented to the Board in the first part of 2010. The Board concluded that appropriate actions are being taken to improve the performance of the Portfolio and that additional time is needed to evaluate the effectiveness of these actions

In assessing the reasonableness of the management fee and expense ratio for ING Strategic Allocation Growth Portfolio, the Board noted that the management fee for the Portfolio is above the median and below the average management fees of the funds in its Selected Peer Group, and that the expense ratio for the Portfolio is equal to the median and below the average expense ratios of the funds in its Selected Peer Group.

Investment Adviser

ING Investments, LLC

7337 East Doubletree Ranch Road

Scottsdale, Arizona 85258

Administrator

ING Funds Services, LLC

7337 East Doubletree Ranch Road

Scottsdale, Arizona 85258

Distributor

ING Funds Distributor, LLC

7337 East Doubletree Ranch Road

Scottsdale, Arizona 85258

Transfer Agent

PNC Global Investment Servicing (U.S.) Inc.

301 Bellevue Parkway

Wilmington, Delaware 19809

Independent Registered Public

Accounting Firm

KPMG LLP

99 High Street

Boston, Massachusetts 02110

Custodian

The Bank of New York Mellon

One Wall Street

New York, New York 10286

Legal Counsel

Goodwin Procter LLP

Exchange Place

53 State Street

Boston, Massachusetts 02109

Before investing, carefully consider the investment objectives, risks, charges and expenses of the variable universal life insurance policy or variable annuity contract and the underlying variable investment options. This and other information is contained in the prospectus for the variable universal life policy or variable annuity contract and the underlying variable investment options. Obtain these prospectuses from your agent/registered representative and read them carefully before investing.


		VPAR-SAIS		(1209-021810)

Item 2.

Code of Ethics.

As of the end of the period covered by this report, Registrant had adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to the Registrant’s principal executive officer and principal financial officer. There were no amendments to the Code during the period covered by the report. The Registrant did not grant any waivers, including implicit waivers, from any provisions of the Code during the period covered by this report. The code of ethics is filed herewith pursuant to Item 10(a)(1), Exhibit 99.CODE ETH.

Item 3.

Audit Committee Financial Expert.

The Board of Trustees has determined that Corine Norgaard and Joseph Obermeyer are each audit committee financial experts, as defined in Item 3 of Form N-CSR. Ms. Norgaard and Mr. Obermeyer are both “independent” for purposes of Item 3 of Form N-CSR.

Item 4.

Principal Accountant Fees and Services.

(a)

Audit Fees: The aggregate fees billed for each of the last two fiscal years for professional services rendered by KPMG LLP (“KPMG”), the principal accountant for the audit of the registrant’s annual financial statements, for services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years were $54,000 for year ended December 31, 2009 and $54,000 for year ended December 31, 2008.

(b)

Audit-Related Fees: The aggregate fees billed in each of the last two fiscal years for assurance and related services by KPMG that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this Item were $6,450 for year ended December 31, 2009 and $6,450 for year ended December 31, 2008.

(c)

Tax Fees: The aggregate fees billed in each of the last two fiscal years for professional services rendered by KPMG for tax compliance, tax advice, and tax planning were $11,250 in the year ended December 31, 2009 and $11,136 in the year ended December 31, 2008. Such services included review of excise distribution calculations (if applicable), preparation of the Funds’ federal, state and excise tax returns, tax services related to mergers and routine consulting.

(d)	All Other Fees: The aggregate fees billed in each of the last two fiscal years for products and services provided by KPMG, other than the services reported in paragraphs (a) through (c) of this Item were $0 in the year ended December 31, 2009 and $17,500 in the year ended December 31, 2008.

(e)(1)

Audit Committee Pre-Approval Policies and Procedures

AUDIT AND NON-AUDIT SERVICES

PRE-APPROVAL POLICY

I.	Statement of Principles

Under the Sarbanes-Oxley Act of 2002 (the “Act”), the Audit Committee of the Board of Directors or Trustees (the “Committee”) of the ING Funds (each a “Fund,” collectively, the “Funds”) set out under Paragraph I on Exhibit A to this Audit and Non-Audit Services Pre-Approval Policy (“Policy”) is responsible for the oversight of the work of the Funds’ independent auditors. As part of its responsibilities, the Committee must pre-approve the audit and non-audit services performed by the auditors in order to assure that the provision of these services does not impair the auditors’ independence from the Funds. The Committee has adopted, and the Board has ratified, this Policy, which sets out the procedures and conditions under which the services of the independent auditors may be pre-approved.

Under Securities and Exchange Commission (“SEC”) rules promulgated in accordance with the Act, the Funds’ may establish two different approaches to pre-approving audit and non-audit services. The Committee may approve services without consideration of specific case-by-case services (“general pre-approval”) or it may pre-approve specific services (“specific pre-approval”). The Committee believes that the combination of these approaches contemplated in this Policy results in an effective and efficient method for pre-approving audit and non-audit services to be performed by the Funds’ independent auditors. Under this Policy, services that are not of a type that may receive general pre-approval require specific pre-approval by the Committee. Any proposed services that exceed pre-approved cost levels or budgeted amounts will also require the Committee’s specific pre-approval.

For both types of approval, the Committee considers whether the subject services are consistent with the SEC’s rules on auditor independence and that such services are compatible with maintaining the auditors’ independence. The Committee also considers whether a particular audit firm is in the best position to provide effective and efficient services to the Funds. Reasons that the auditors are in the best position include the auditors’ familiarity with the Funds’ business, personnel, culture, accounting systems, risk profile, and other factors, and whether the services will enhance the Funds’ ability to manage and control risk or improve audit quality. Such factors will be considered as a whole, with no one factor being determinative.

The appendices attached to this Policy describe the audit, audit-related, tax-related, and other services that have the Committee’s general pre-approval. For any service that has been approved through general pre-approval, the general pre-approval will remain in place for a period 12 months from the date of pre-approval, unless the Committee determines that a different period is appropriate. The Committee will annually review and pre-approve the services that may be provided by the independent auditors without specific pre-approval. The Committee will revise the list of services subject to general pre-approval as appropriate. This Policy does not serve as a delegation to Fund management of the Committee’s duty to pre-approve services performed by the Funds’ independent auditors.

II.

Audit Services

The annual audit services engagement terms and fees are subject to the Committee’s specific pre-approval. Audit services are those services that are normally provided by auditors in connection with statutory and regulatory filings or engagements or those that generally only independent auditors can reasonably provide. They include the Funds’ annual financial statement audit and procedures that the independent auditors must perform in order to form an opinion on the Funds’ financial statements (e.g., information systems and procedural reviews and testing). The Committee will monitor the audit services engagement and approve any changes in terms, conditions or fees deemed by the Committee to be necessary or appropriate.

The Committee may grant general pre-approval to other audit services, such as statutory audits and services associated with SEC registration statements, periodic reports and other documents filed with the SEC or issued in connection with securities offerings.

The Committee has pre-approved the audit services listed on Appendix A. The Committee must specifically approve all audit services not listed on Appendix A.

III.

Audit-related Services

Audit-related services are assurance and related services that are reasonably related to the performance of the audit or the review of the Funds’ financial statements or are traditionally performed by the independent auditors. The Committee believes that the provision of audit-related services will not impair the independent auditors’ independence, and therefore may grant pre-approval to audit-related services. Audit-related services include accounting consultations related to accounting, financial reporting or disclosure matters not classified as “audit services;” assistance with understanding and implementing new accounting and financial reporting guidance from rulemaking authorities; agreed-upon or expanded audit procedures relating to accounting and/or billing records required to respond to or comply with financial, accounting or regulatory reporting matters; and assistance with internal control reporting requirements under Form N-SAR or Form N-CSR.

The Committee has pre-approved the audit-related services listed on Appendix B. The Committee must specifically approve all audit-related services not listed on Appendix B.

IV.

Tax Services

The Committee believes the independent auditors can provide tax services to the Funds, including tax compliance, tax planning, and tax advice, without compromising the auditors’ independence. Therefore, the Committee may grant general pre-approval with respect to tax services historically provided by the Funds’ independent auditors that do not, in the Committee’s view, impair auditor independence and that are consistent with the SEC’s rules on auditor independence.

The Committee will not grant pre-approval if the independent auditors initially recommends a transaction the sole business purpose of which is tax avoidance and the tax treatment of which may

not be supported in the Internal Revenue Code and related regulations. The Committee may consult outside counsel to determine that tax planning and reporting positions are consistent with this Policy.

The Committee has pre-approved the tax-related services listed on Appendix C. The Committee must specifically approve all tax-related services not listed on Appendix C.

V.	Other Services

The Committee believes it may grant approval of non-audit services that are permissible services for independent auditors to a Fund. The Committee has determined to grant general pre-approval to other services that it believes are routine and recurring, do not impair auditor independence, and are consistent with SEC rules on auditor independence.

The Committee has pre-approved the non-audit services listed on Appendix D. The Committee must specifically approve all non-audit services not listed on Appendix D.

A list of the SEC’s prohibited non-audit services is attached to this Policy as Appendix E. The SEC’s rules and relevant guidance should be consulted to determine the precise definitions of these impermissible services and the applicability of exceptions to certain of the SEC’s prohibitions.

VI.

Pre-approval of Fee levels and Budgeted Amounts

The Committee will annually establish pre-approval fee levels or budgeted amounts for audit, audit-related, tax and non-audit services to be provided to the Funds by the independent auditors. Any proposed services exceeding these levels or amounts require the Committee’s specific pre-approval. The Committee considers fees for audit and non-audit services when deciding whether to pre-approve services. The Committee may determine, for a pre-approval period of 12 months, the appropriate ratio between the total amount of fees for the Fund’s audit, audit-related, and tax services (including fees for services provided to Fund affiliates that are subject to pre-approval), and the total amount of fees for certain permissible non-audit services for the Fund classified as other services (including any such services provided to Fund affiliates that are subject to pre-approval).

VII.	Procedures

Requests or applications for services to be provided by the independent auditors will be submitted to management. If management determines that the services do not fall within those services generally pre-approved by the Committee and set out in the appendices to these procedures, management will submit the services to the Committee or its delagee. Any such submission will include a detailed description of the services to be rendered.

Notwithstanding this paragraph, the Committee will, on quarterly basis, receive from the independent auditors a list of services provided to date by the auditors during Pre-Approval Period.

VIII.

Delegation

The Committee may delegate pre-approval authority to one or more of the Committee’s members. Any member or members to whom such pre-approval authority is delegated must report any pre-approval decisions, including any pre-approved services, to the Committee at its next scheduled meeting. The Committee will identify any member to whom pre-approval authority is delegated in writing. The member will retain such authority for a period of 12 months from the date of pre-approval unless the Committee determines that a different period is appropriate. The period of delegated authority may be terminated by the Committee or at the option of the member.

IX.

Additional Requirements

The Committee will take any measures the Committee deems necessary or appropriate to oversee the work of the independent auditors and to assure the auditors’ independence from the Funds. This may include reviewing a formal written statement from the independent auditors delineating all relationships between the auditors and the Funds, consistent with Independence Standards Board No. 1, and discussing with the auditors their methods and procedures for ensuring independence.

Effective April 23, 2008, the KPMG LLP (“KPMG”) audit team for the ING Funds accepted the global responsibility for monitoring the auditor independence for KPMG relative to the ING Funds. Using a proprietary system called Sentinel, the audit team is able to identify and manage potential conflicts of interest across the member firms of the KPMG International Network and prevent the provision of prohibited services to the ING entities that would impair KPMG independence with the respect to the ING Funds. In addition to receiving pre-approval from the ING Funds Audit Committee for services provided to the ING Funds and for services for ING entities in the Investment Company Complex, the audit team has developed a process for periodic notification via email to the ING Funds’ Audit Committee Chairpersons regarding requests to provide services to ING Groep NV and its affiliates from KPMG offices worldwide. Additionally, KPMG provides a quarterly summary of the fees for services that have commenced for ING Groep NV and Affiliates at each Audit Committee Meeting.

Date last approved: December 10, 2008

Appendix A

Pre-Approved Audit Services for the Pre-Approval Period January 1, 2009 through December 31, 2009


Service

	The Fund(s)	Fee Range
Statutory audits or financial audits (including tax services associated with audit services)	ü	As presented to Audit Committee¹

Services associated with SEC registration statements, periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings (e.g., consents), and assistance in responding to SEC comment letters.	ü	Not to exceed $9,750 per filing

Consultations by Fund management with respect to accounting or disclosure treatment of transactions or events and/or the actual or potential effect of final or proposed rules, standards or interpretations by the SEC, Financial Accounting Standards Board, or other regulatory or standard setting bodies.	ü	Not to exceed $8,000 during the Pre-Approval Period

For new Funds launched during the Pre-Approval Period, the fee ranges pre-approved will be the same as those for existing Funds, pro-rated in accordance with inception dates as provided in KPMG’s Proposal or any Engagement Letter covering the period at issue. Fees in the Engagement Letter will be controlling.

Appendix B

Pre-Approved Audit-Related Services for the Pre-Approval Period January 1, 2009 through December 31, 2009


Service

	The Fund(s)	Fund Affiliates	Fee Range
Services related to Fund mergers (Excluding tax services – See Appendix C for tax services associated with fund mergers)	ü	ü	Not to exceed $10,000 per merger

Consultations by Fund management with respect to accounting or disclosure treatment of transactions or events and/or the actual or potential effect of final or proposed rules, standards or interpretations by the SEC, Financial Accounting Standards Board, or other regulatory or standard setting bodies. [Note: Under SEC rules some consultations may be “audit” services and others may be “audit-related” services.]	ü		Not to exceed $5,000 per occurrence during the Pre-Approval Period

Review of the Funds’ semi-annual financial statements	ü		Not to exceed $2,200 per set of financial statements per fund

Reports to regulatory or government agencies related to the annual engagement	ü		Up to $5,000 per occurrence during the Pre-Approval Period

Regulatory compliance assistance	ü	ü	Not to exceed $5,000 per quarter

Training courses		ü	Not to exceed $2,000 per course

Appendix C

Pre-Approved Tax Services for the Pre-Approval Period January 1, 2009 through December 31, 2009


Service

	The Fund(s)	Fund Affiliates	Fee Range
Preparation of federal and state income tax returns and federal excise tax returns for the Funds including assistance and review with excise tax distributions.	ü		As presented to Audit Committee²

Review of IRC Sections 851(b) and 817(h) diversification testing on a real-time basis	ü		As presented to Audit Committee²

Assistance and advice regarding year-end reporting for 1099’s	ü		As presented to Audit Committee²

Tax assistance and advice regarding statutory, regulatory or administrative developments	ü	ü	Not to exceed $5,000 in aggregate for the Funds or for the Funds’ investment adviser during the Pre-Approval Period

Tax training courses		ü	Not to exceed $2,000 per course during the Pre-Approval Period

²	For new Funds launched during the Pre-Approval Period, the fee ranges pre-approved will be the same as those for existing Funds, as provided in KPMG’s Proposal or any Engagement Letter covering the period at issue. Fees in the Engagement Letter will be controlling.

Appendix C, continued


Service

	The Fund(s)	Fund Affiliates	Fee Range
Tax services associated with Fund mergers	ü	ü	Not to exceed $4,000 per fund per merger during the Pre-Approval Period

Other tax-related assistance and consultation, including, without limitation, assistance in evaluating derivative financial instruments and international tax issues, qualification and distribution issues, and similar routine tax consultations	ü		Not to exceed $50,000 during the Pre-Approval Period

Appendix D

Pre-Approved Other Services for the Pre-Approval Period January 1, 2009 through December 31, 2009


Service

	The Fund(s)	Fund Affiliates	Fee Range
Agreed-upon procedures for Class B share 12b-1 programs		ü	Not to exceed $60,000 during the Pre-Approval Period

Security counts performed pursuant to Rule 17f-2 of the 1940 Act (i.e., counts for Funds holding securities with affiliated sub-custodians) (Cost to be split 50% the funds and 50% ING Investments, LLC)	ü	ü	Not to exceed $5,000 per Fund during the Pre-Approval Period

Appendix E

Prohibited Non-Audit Services

Dated: 2009

•

Bookkeeping or other services related to the accounting records or financial statements of the Funds

•

Financial information systems design and implementation

•

Appraisal or valuation services, fairness opinions, or contribution-in-kind reports

•

Actuarial services

•

Internal audit outsourcing services

•

Management functions

•

Human resources

•

Broker-dealer, investment adviser, or investment banking services

•

Legal services

•

Expert services unrelated to the audit

•

Any other service that the Public Company Accounting Oversight Board determines, by regulation, is impermissible

EXHIBIT A

ING VP BALANCED PORTFOLIO, INC.

ING STRATEGIC ALLOCATION PORTFOLIOS, INC.

ING VP INTERMEDIATE BOND PORTFOLIO

ING VP MONEY MARKET PORTFOLIO

ING VARIABLE FUNDS

ING VARIABLE PORTFOLIOS, INC.

ING SERIES FUND, INC.

(e)(2)

Percentage of services referred to in 4(b) — (4)(d) that were approved by the audit committee

100% of the services were approved by the audit committee.

(f)	Percentage of hours expended attributable to work performed by other than full time employees of KPMG if greater than 50%.

Not applicable.

(g)

Non-Audit Fees: The non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser, and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant were $2,106,219 for year ended December 31, 2009 and $1,826,535 for year ended December 31, 2008.

(h)

Principal Accountants Independence: The Registrant’s Audit committee has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to Rule 2-01(c)(7)(ii) of Regulation S-X is compatible with maintaining KPMG’s independence.

Item 5.

Audit Committee of Listed Registrants.

Not applicable.

Item 6.

Schedule of Investments

Schedule is included as part of the report to shareholders filed under Item 1 of this Form.

Item 7.

Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 8.

Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.

Item 9.

Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers

Not applicable.

Item 10.

Submission of Matters to a Vote of Security Holders.

The Nominating Committee operates pursuant to a Charter approved by the Board. The primary purpose of the Nominating Committee is to consider, evaluate and make recommendations to the Board with respect to the nomination and selection of Independent Trustees. In evaluating candidates, the Nominating Committee may consider a variety of factors, but specific qualifications of candidates for Board membership will be based on the needs of the Board at the time of nomination.

The Nominating Committee is willing to consider nominations received from shareholders and shall assess shareholder nominees in the same manner as it reviews nominees it identifies. A shareholder nominee for director should be submitted in writing to the Fund’s Secretary. Any such shareholder nomination should include sufficient background information concerning the candidate and should be received in a timely

manner. At a minimum, the following information as to each individual proposed for nomination as director should be included: the individual’s written consent to be named in the proxy statement as a nominee (if nominated) and to serve as a director (if elected), and all information relating to such individual that is required to be disclosed in a solicitation of proxies for election of directors, or is otherwise required, in each case under applicable federal securities laws, rules and regulations.

The Secretary shall submit all nominations received in a timely manner to the Nominating Committee. To be timely, any such submission must be delivered to the Fund’s Secretary not earlier than the 90^th day prior to such meeting and not later than the close of business on the later of the 60^th day prior to such meeting or the 10^th day following the day on which public announcement of the date of the meeting is first made, by either disclosure in a press release or in a document publicly filed by the Fund with the SEC.

In evaluating a candidate for the position of Independent Trustee, including any candidate recommended by shareholders of the Fund, the Nominating Committee shall consider the following: (i) the candidate’s knowledge in matters relating to the mutual fund industry; (ii) any experience possessed by the candidate as a director or senior officer of other public companies; (iii) the candidate’s educational background, reputation for high ethical standards and professional integrity; (iv) any specific financial, technical or other expertise possessed by the candidate, and the extent to which such expertise would complement the Board’s existing mix of skills, core competencies and qualifications; (v) the candidate’s perceived ability to contribute to the ongoing functions of the Board, including the candidate’s ability and commitment to attend meetings regularly and work collaboratively with other members of the Board; (vi) the candidate’s ability to qualify as an Independent Trustee for purposes of the 1940 Act; and (vii) such other factors as the Committee determines to be relevant in light of the existing composition of the Board and any anticipated vacancies. Prior to making a final recommendation to the Board, the Committee shall conduct personal interviews with those candidates it concludes are the most qualified candidates.

Item 11.

Controls and Procedures.

(a)

Based on our evaluation conducted within 90 days of the filing date, hereof, the design and operation of the registrant’s disclosure controls and procedures are effective to ensure that material information relating to the registrant is made known to the certifying officers by others within the appropriate entities, particularly during the period in which Forms N-CSR are being prepared, and the registrant’s disclosure controls and procedures allow timely preparation and review of the information for the registrant’s Form N-CSR and the officer certifications of such Form N-CSR.

(b)	There were no significant changes in the registrant’s internal controls that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12.

Exhibits.



(a)(1)		Code of Ethics pursuant to Item 2 of Form N-CSR is filed and attached hereto as EX-99.CODE ETH.

(a)(2)		A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2 under the Act (17 CFR 270.30a-2) is attached hereto as EX-99.CERT.

(b)		The officer certifications required by Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto as EX-99.906CERT

(3)		Not applicable.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant): ING Strategic Allocation Portfolios, Inc.



By		/s/ Shaun P. Mathews
		Shaun P. Mathews
		President and Chief Executive Officer

Date:		March 4, 2010

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



By		/s/ Shaun P. Mathews
		Shaun P. Mathews
		President and Chief Executive Officer

Date:		March 4, 2010

By		/s/ Todd Modic
		Todd Modic
		Senior Vice President and Chief Financial Officer

Date:		March 4, 2010