So far this year, this is what our friends from the federal government have done for e – citizens hoping to find simple ways to save enough money for retirement without anyone having blindfolded them.
■ It has continued a two-year fight against a rule that requires many pension advisers to act in the best interests of their clients.
■ Reverse a rule that would have made it easier for states to create retirement plans for people who do not have one at work.
■ Abandoned a new federal program to help low-income savers, especially young people.
This week, meanwhile, it brought news of the Securities and Exchange Commission standing to – wait – federal employees and their retirement money! These workers have what is probably the best retirement plan of its kind in the country, called the rescue plan. The S.E.C. He accused four brokers in Georgia and a company that represented a fraud after presuming about 200 people to move money from the plans and put the funds in costly earnings, earning honest commissions.
So this is how things work: other obstacles for everyday workers and a fabulous plan for federal employees – so good that alleged authors had to deceive, according to S.E., to persuade people to abandon it. We should all have such beautiful things and we can still have one day. But in the meantime, we pray and take the details because they have lessons for all of us.
The rescue plan, a defined contribution plan similar to a 401 (k) for officials and retired, as well as military members, is almost all right. Investment choices are limited and include index funds that each action in an industry rather than trying to choose actions that will do better than others. The total costs are as low as employer-based retirement savings plans: in 2016, they were 38 cents for every $ 1,000 that someone had invested.
Given how well federal employees do, how do you get the older ones who are fit to move their money off the plan to do so? According to S.E., he pretends to be affiliated with the plan and with the government.
What brings us to the agency’s wrangling goal, Federal Councilors of Federal Employees in Roswell, Ga. She has an official spiffy throat on her home page and notes, despite her name, that “she does not engage in T.S.P. counseling.”
Look further at the company’s website and you’ll find the following testimony of someone named Judy, who said, “This service is the best guarded secret in government,” which certainly means a connection. Also call your telephone number, and you can press 3 for information on “Thrift Savings Plan Revisions”.
According to S.E.C. Denunciation, many people did, especially after federal employees sought and targeted. (The agency would not comment just as the company did or respond to any of my follow-up questions.) In addition to the name and logo of the company, the agency also indicated the names of modules and investments that The company used to “fool” Clients to think it was “affiliated or approved by the federal government”.
These investments. According to S.E.C, about 200 people have finished with about 200 variable annuities with a nominal value of over 40 million dollars. For their efforts, the four individuals nominated in the complaint – Christopher S. Laws, Jonathan Dax Cooke, Danny S. Hood and Brandon P. Long – shared about $ 1.7 million in commissions. Some of their clients’ reports, according to the complaint, did not even mention that they were putting people in variable annuities, which are complex insurance products.
Could this be because mediators knew well and well that variable annuities are dirty words to many investors who have benefited from low-cost pension accounts? A customer told S.E.C. She repeatedly told Mr. Long that she could not believe that the investments the company was pushing were actually affiliated with the federal employee plan. Perhaps even they did not want customers to ask about taxes, which turned out to be at least 2.55 percent per year and a delivery fee of up to 8.5 percent if they were sold too soon.
After the S.E.C. Action, Mr. Laws sent me a statement that accused the defamation and bullying agency. He said the agency should have realized that he and Mr. Cooke did not know that their colleagues were involved in alleged fouls. The release also noted that there were hundreds of other customers that the company said to stay in T.S.P. Or roll their money into an individual retirement account, and accused S.E.C. To use this case as a way to discourage others from transferring money from T.S.P.
The S.E.C. He refused to comment on this too. When I called the lawyer to ask him if a fiduciary rule would prevent his company from entering this very hot water, he told me the press release (which did not say the word “trustee”) and then re-affirmed me.
Barbara Roper, director of investor protection at the American Consumer Federation, said the shift to costly rents would violate a “standard of interest”. He also noted that the rules affect the behavioral norms, which means brokers might not have even worried about attempting to approach Thrift’s savings plan participants with such offers if a trustee rule had been in place.
Jack Dolan, meanwhile, a spokeswoman for the American Life Assurance Council, did not want to deepen the case, but stated that a trustee rule did not necessarily deter bad actors from committing a total fraud.
So what is the best way to keep these people away? It helps to have a fantastic plan with low taxes, since it’s harder to be tempted to move if you’re already in a good place. In 2014, Sen. Marco Rubio, Republican of Florida, proposed that anyone and anyone who does not have a work plan should be able to sign for T.S.P. He noticed the “upset” irony that congressional members working for American citizens have a very good plan, while many voters do not have it at all.
For his problem, Mr. Rubio was called by Brian Graff, Executive Director of the American Retirement and Actuarial Company, such as “trying to retire Obamacare” (note the rare use of “Obamacare” as a verb).
Last year and again this week, I tried to convince the senator to talk about this problem, but it would not.
As long as your idea is not realized, you have to make your own way in the world of retirement savings, either by lobbying your employer for a better plan, or by countering people who sell controversial investment strategies.
In both cases, ask for a simple English explanation of any fee that you may pay now or in the future, under any circumstances. You would like to know how the employer, the manager or the single sales representative are compensated to work with you. Run fast and far if guaranteed returns seem too good to be true, or if you do not understand the investment. Use online search tools like BrokerCheck to search for people who want to advise you. And you can enforce your trusting standard by asking anyone who works with you to sign the trusted form we sent on our website for your convenience.
These tactics do not inoculate you from any professional by bringing bad advice. But they probably frighten people who want to hurt themselves enough to move on to another sign, at least until decent investment plans are standard for everyone and federal rules are stiff enough to push all the shadow characters