Washington state government and military retirees have been targeted by salespeople and advertising from pension advance companies offering immediate lump sum loans in exchange for future pension payments.
Retirees who sign over the rights to their pensions may be required to make payments to these companies for many years to pay back the money they borrowed.
The fees and transaction costs may be prohibitive, and the lump sum may be taxable. Additionally, some pension advance companies require the purchase of a life insurance policy so they can collect any money still owing after the retiree’s death.
It’s important to be aware that some salespeople can be aggressive or persuasive when trying to get retirees to sell the rights to their future pension benefits and, in some cases, there may be outright fraud. Retirees are advised to consult with an attorney or financial planner and carefully read the contract before signing.
The Washington State Department of Financial Institutions (DFI) is actively seeking out individuals who have signed up for such pension advances and would like to identify entities offering this product to Washington state retirees to ensure that the proper protections are being afforded our retirees. Learn more on the DFI website.
The US Securities and Exchange Commission (SEC) has issued an Investor Bulletin for consumers regarding pension income streams. Read the bulletin to learn more.
If you have questions about any of your DRS pension benefits, please contact us directly at 360-664-7000 or toll-free at 800-547-6657. TTY users dial 711 for the Washington Relay Service. Or go online at www.drs.wa.gov and log in/sign up for your online account information.