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Pension Poaching

“Pension poaching” is a financial scam targeting veterans, perpetrated by shady advisers who promise to help former service members grow their retirement funds or obtain extra benefits from the Department of Veterans Affairs (VA).

The schemes often involve financial maneuvers that can backfire and actually disqualify veterans from needed benefits, or tie up their savings in investments that earn lucrative fees for the advisers. According to AARP's November 2021 Scambush report on frauds against veterans, nearly half of former and active-duty service members approached by pension poachers erroneously signed over VA benefits.

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A common form of the scam starts with an unscrupulous lawyer, financial planner or insurance agent cold-calling veterans, sending mail solicitations, or showing up at a senior center or assisted living facility, offering to help ex-military members apply for a VA program called Aid and Attendance (A&A). This is a legitimate program that boosts pension benefits to help older veterans pay for long-term care if they are bedridden, live in a nursing home, or need help with daily living activities such as bathing, eating or using the toilet.

Only veterans with limited earnings and assets are eligible for A&A. Pension poachers try to convince you that it’s possible to get around the rules by restructuring your finances so you appear to be needy enough to qualify.

For instance, they might recommend setting up a trust to transfer your retirement assets to family members. But that could get you disqualified by the VA, which scrutinizes any assets you’ve shifted in the three years before you file an A&A claim. Even if you manage to secure A&A, you might disqualify yourself from Medicaid, which has a five-year “look back period” for changes in assets. Medicaid can cover long-term care, and losing access to it could be a blow if the extra pension money from the VA isn’t enough to pay for the help you need.

Or a sham adviser might urge you to use retirement savings to buy an annuity. But these insurance products aren’t right for everyone, the Federal Trade Commission (FTC) warns: While annuities make regular payments over time, they can lock up the bulk of your cash for years. If a major need arises, you often can’t tap that money without paying a hefty penalty for early withdrawal.

Pension poachers tend to leave information like that out when they’re selling you on how much they can make your money grow — and collecting hundreds or thousands of dollars in fees for their supposed services.

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Have you seen this scam?

  • Call the AARP Fraud Watch Network Helpline at 877-908-3360 or report it with the AARP Scam Tracking Map.  
  • Get Watchdog Alerts for tips on avoiding such scams.

Warning Signs

  • A financial adviser tells you that you’re entitled to additional benefits simply because you’re a veteran.
  • An adviser guarantees that they will get you an enhanced VA pension.

How to protect yourself from this scam

  • Do check the VA’s searchable database to see whether an attorney or financial professional is VA-accredited and has the required training to complete and submit claims.
  • Do run a background check on any professional who promises to boost your VA benefits (see “More Resources” below).
  • Do carefully read all contracts and other paperwork related to an investment or application. If you don’t understand something, get an explanation in writing.
  • Do discuss any proposed pension or investment moves with a trusted friend or family member before taking action.
  • Do beware of advisers who offer free food. Some rogue operators offer lunch or snacks to draw veterans to “financial seminars.”
  • Do apply directly to the VA if you think you’re entitled to Aid and Attendance benefits (see "More Resources" below). There’s no cost for the forms and no fees to apply.
  • Don’t trust an organization or individual that contacts you out of the blue and offers to assist you with a VA claim.
  • Don’t hesitate to say “no” if an adviser pressures you to act fast.
  • Don’t be swayed by a name. Words like “veterans” or “military families” in an organization’s name doesn’t necessarily mean it’s legitimate, the FTC says.
  • Don’t settle for vague or evasive answers. If a financial professional won’t definitively answer your questions, walk away.
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More Resources

  • If you’ve been approached or victimized by a pension poacher, file a complaint to the FTC, online or by calling 877-382-4357.
  • For information you can trust on VA pension options, visit the department’s Pension page and eBenefits portal or contact your state veterans-affairs office.
  • Try these tools and resources to check on someone pitching financial products and plans for veterans:
    • For financial planners and advisers, use the Financial Industry Regulatory Authority’s BrokerCheck tool.
    • For lawyers, contact your state’s bar association, which can tell you if the person has been the subject of any ethics complaints.
    • For insurance agents selling annuities, contact your state insurance regulator.

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Have you seen this scam?

  • Call the AARP Fraud Watch Network Helpline at 877-908-3360 or report it with the AARP Scam Tracking Map.  
  • Get Watchdog Alerts for tips on avoiding such scams.