Tuesday, June 20, 2006
CROOKED UNION STEERS TEACHERS TO A BAD INVESTMENT
JUST TO GET THE "VIGORISH" IN A SWEETHEART DEAL
Footnote to today's earlier story about the wacky, radical, non-education items on the agenda at the annual convention of the National Education Association that's coming up:
Come to find out, also on the eve of the NEA convention, New York's largest teachers union agreed this week to end a kickback scheme that allowed it to pocket $3 million from insurer ING Group in exchange for promoting that company's high-cost, low-yield annuities to teachers.
The annuities carried fees and expenses of as much as 2.85% a year, or about three times the cost of many popular mutual fund investments. But the sweetheart deal -- the fees paid directly to the union for their endorsement -- was concealed from teacher members.
The uinon has to hire an independent consultant to suggest alternative investments to union members, pay $100,000 to cover costs of the state investigation, provide members with annual access to free and objective investment advice, and allow the 53,000 people who purchased retirement products it endorsed in the past to roll their balances into a newly endorsed product at no cost.
The union's deal with ING was spotlighted in an April 25 Los Angeles Times story about how large teachers unions endorse pension supplements that do little or no good for the individual teachers, but line the pockets of the union wonks.
Once again, you have to ask: why, oh why, do our nice, deserving teachers stick with these creeps?
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