SEC, FINRA warn retirees on pension buyouts

The top U.S. securities regulators on Thursday warned individual investors about pension purchasing companies that persuade retirees and military veterans to sign over pension checks in return for lump-sum payments, as regulatory concerns about the practice mount. Individuals who receive monthly pension payments could be targets of salespeople offering an immediate lump sum in exchange for some or all of their future pension payments, the U.S. Securities and Exchange Commission and Financial Industry Regulatory Authority wrote in a joint alert. Pension recipients who sign over their payments to so-called “factoring” or “pension advance” companies, will almost always receive lump-sum payments that are lower than the present value of their future income streams, the SEC and FINRA wrote. The companies also target individuals who are receiving payments for settlements of personal injury lawsuits, according to the regulators.
More on Reuters here.