KIRKSVILLE, Mo. — State Treasurer Clint Zweifel is asking for help from Attorney General Chris Koster and the legislature to investigate his growing concerns about pension advances in the state.
Pension advance, according to a statement from Zweifel, is a financial agreement promising access to up-front cash in exchange for a portion of the individual’s pension plan, which can ultimately cost retirees thousands in interest and fees.
Zweifel says there are businesses that “prey” on retirees that tend to face financial difficulties with medical bills and long-term care.
“Pension advance contracts are unregulated and often do not fully disclose the effective interest rate and other fees associated with them,” Zweifel says in a release Tuesday. “These businesses are not held to the same standards as banks and life insurance companies. I want Missourians to be aware of this and to ask questions before making decisions that could impact them and their families for years to come”
The Treasurer is asking for help from Attorney General Koster to investigate the issue further, “leveraging the resources” of the two office.
“I appreciate Treasurer Zweifel bringing the issue of pension advances to our attention,” Koster says in the release. “After years of public service, no one should be taken advantage of in their retirement years. I look forward to working with Treasurer Zweifel to protect Missouri consumers by investigating how pension advances are being conducted in our state.”
Additionally, Zweifel says he is seeking for help from the legislature to propose legislation to prohibit companies from offering pension advances to state retirees, something he says has happened on a federal level by Congress with military pensions.
Sen. John Lamping, R-St. Louis County — chairman of the Senate Seniors, Families and Pensions Committee — says that currently, retirees of all kinds have the opportunity to choose whether they want to pursue working with these companies to receive a cash flow or lump sum of money. The Missouri State Employees’ Retirement System (MOSERS) counsels their members, public retirees, to make sure they understand the pros and cons of decisions like pension advances.
The issue, Lamping says, is more of a consumer protection concern, and doesn’t alter the actual pension itself.
“I applaud the fact the treasurer is looking to engage the General Assembly,” he says. “I think I would be more encouraged if he were to take up ideas concerning the long-term viability of the pension fund.”
Zweifel also is asking citizens who have been contacted by companies about pension advances to contact his office through their Pension Advance Portal.
Ashley Jost is no longer with The Missouri Times. She worked as the executive editor for several months, and a reporter before that.