THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Sunday, December 3, 1995 TAG: 9512020027
SECTION: COMMENTARY PAGE: J4 EDITION: FINAL
TYPE: Editorial
LENGTH: Short : 38 lines
Virginia taxed federal civilian and military retirees when it shouldn't have. Court-ordered refunds will be paid out in installments over a span of years to many of the pensioners. Now, a New Jersey company has seen an opportunity to make a fast buck by giving the retirees a faster buck.
Singer Asset Finance Co. will offer some 95,000 people a chance to lay their hands on the money they're owed immediately - for a price. It's another reminder that there's no free lunch. To get paid, early retirees will have to settle for 70 percent to 90 percent of the money they'd get if they waited. Singer pockets the rest - a sum that could come to $10 million or more.
It might seem silly for retirees to give away as much as $3 for every $10 they're owed. But taking the Singer deal isn't necessarily irrational. Some retirees may feel the actuarial tables are against them and choose to spend 70 percent of their money while they can since they can't take any of it with them if they happen to exit before it arrives. Others may feel they can recoup the fee and more by investing the proceeds shrewdly.
There's nothing wrong with Singer offering such a deal or with retirees accepting it so long as they understand what they're agreeing to. That's the real concern.
Some retirees may skip the fine print and conclude they can have today what they'd otherwise have to wait years to receive. If they don't go into the deal with their eyes open, they may not realize until too late that they are agreeing to settle for a fraction of the cash they are owed.
As with all such bargains, the watchword needs to be caveat emptor. Let the buyer beware. Or in this case, let the retiree be wary. by CNB