Jefferson City – House Bill 1217, if signed into law by Gov. Jay Nixon, will make Missouri the first state in the nation to prohibit pension advances targeting public employees, State Treasurer Clint Zweifel said.
The bill, which passed with bipartisan support, provides the Attorney General authority to enforce the prohibition.
“As State Treasurer, it is my job to ensure Missouri’s tax dollars are spent wisely on investments with strong returns for tax payers, and as a trustee on the state employees’ retirement system, ensure tax payers and retirees are both protected,” Zweifel said.
“Pension advances are designed to deceive hard-working public employees and these schemes threaten retirement security for our retirees. I am proud of the steps we have taken to make Missouri the first state in the nation to prohibit this dubious practice.”
Pension advance schemes take advantage of retired public employees, including teachers, fire fighters and veterans, by providing an upfront lump sum in exchange for all or a portion of their public pension benefit.
The schemes often seniors, struggling to pay medical bills or care for aging parents or partners. Pension advances are unregulated and can be easily misrepresented to the borrower. Interest rates associated with these arrangements can reach as high as 106 percent.
House Bill 1217 will prohibit this practice and ensures victims of pension advances will be allowed to reclaim any money lost during these transactions.
Attorney General Chris Koster, who partnered with Zweifel in the effort to pass the pension bill, applauded the legislature for measure’s passage.
“After years of public service, no one should be taken advantage of in their retirement years,” Koster said. “I thank Treasurer Zweifel for raising the issue, and the General Assembly for their quick action to protect public employees from pension scams.”
The pension bill also contains another legislative priority for Zweifel regarding pension forfeitures.
Under current law, public employees in certain retirement systems may still collect a pension even if they have been convicted of a felony such as embezzling public funds. House Bill 1217 will close that loophole, adding another layer of protection for Missouri taxpayers against abuse or misappropriation of public funds.