More than half a million public employees are the latest targets for investment fraud scam artists. Uncertainty over retirement contributions and the possibility governments will make changes in pension plans has opened a new door for scam artists.
There are more than 550 thousand public employees enrolled in the Florida Retirement System. Since July, the state has been taking three percent of their paychecks as a retirement contribution. And that’s causing many to look at private pension plans that may not be in their best interests. Wayne Blanton is head of the Florida School Boards Association. “We found that a number of those were charging very, very high commissions.”
One person ended up with money they couldn’t touch for a decade. Some plans are so complex that even career insurance regulator Robin Westcott says she has trouble understanding the policy. “It is so important for consumers to be educated and understand the products that they are buying, especially in today’s economy. Many of our seniors have experienced this type of difficulty.”
More changes are almost certainly on the table as lawmakers struggle to make ends meet. Governor Rick Scott wants all new hires to go into what is called a defined benefits plan. That’s where employees manage their own retirement. Westcott says the best that you can do is think twice and ask questions. “Talk to the agent that’s selling you that policy. They should be knowledgeable and informed. They are an agent of the company. They should understand the nuances of the product that they’re selling.”
In addition to asking questions, those planning for retirement should get several proposals. After signing a contract, customers have 21 days to cancel.
An independent investment council made up of public employers and public servants has received a 750 thousand dollar grant to educate public employees on what plans may or may not work for them.