Loan sharking pensions from those struggling to eat in a 12 percent inflationary reality.

Moore soon found himself two months behind on rent and at least 10 days from payday. In bed that night, he saw a TV ad for Future Income Payments, a company based in Irvine, Calif., that buys pensions in exchange for a lump sum. The company said it had worked with military personnel and government workers. Ten minutes later, he got up and made the call.

The next day, a company representative called Moore back and explained that he would receive a $5,000 cash advance for selling part of his pension. In exchange, Moore would have to pay the company $510 a month for five years  — a total of $30,600.

If it were a typical loan, that would amount to $25,600 in interest — a rate of 512 percent.
Pension advances are complex products that offer retirees a lump-sum cash advance in exchange for all, or part, of their future pension payments. Consumer groups say they are pitched disproportionately to retired military members and federal retirees.

The payouts are typically less than what retirees would receive had they chosen to receive lump-sum payments directly from their pension provider, consumer groups say.