The Office of Personnel Management (OPM) is warning federal employees about a new “aggressive marketing push” by companies offering to buy their annuities.
Companies are calling retirees offering a cash payment in exchange for future annuity payments generally worth much less than their long-term worth, and typically charging high interest rates and fees.
OPM reported receiving numerous phone calls from a company asking to verify annuity amounts and banking information, including routing numbers and account numbers. This particular company, which OPM did not name, is currently under investigation by the Consumer Financial Protection Bureau (CFPB).
OPM recommends that annuitants who receive these calls or other suspected scams report them to the agency’s Office of Inspector General by calling 877-499-7295 or submitting an online complaint form.
Here are three tips from CFPB’s website for protecting your retirement pension:
1. Avoid loans with high fees and interest. Pension advance companies may not always advertise their fees and interest rates. Do your homework before signing anything.
2. Don’t sign over control of your benefits. Companies sometimes arrange for monthly payments to be automatically deposited in a newly created bank account so the company can withdraw payments, fees and interest charges from the account.
3. Don’t buy life insurance that you don’t want or need. Pension advance companies sometimes require consumers to sign up for life insurance with the company as the consumer’s beneficiary. If you sign up for life insurance with the pension advance company as your beneficiary, you could end up footing the bill, whether you know it or not.
Earlier this year, OPM warned of another scam involving imposters calling retirees and threatening to prosecute them and cut off annuities unless they made an immediate payment.