NEA Rakes In Millions Selling Annuities To Teachers
For over half a century, NEA has been in the business of selling financial and investment products to teachers.
NEA members sit on the boards of many state teacher pension funds which oversee the investment of hundreds of billions in retirement savings.
Less well-known is the fact that NEA has long been in the business of providing investment advice to teachers through an investment management affiliate registered with the U.S. Securities and Exchange Commission, NEA Member Benefits. That is, the powerful union is also an investment adviser that profits from selling certain retirement products to teachers.
The fact that NEA rakes in millions from selling variable annuity and mutual fund investments to teachers is troubling to Dean Dennis, President of the Ohio Retirement for Teachers Assocation. Dennis has two concerns:
“First, I question whether NEA, which claims to have conducted extensive due diligence and
selected a variable annuity firm as the exclusive program provider to its members, is really up to
the task. Should NEA even be involved with picking winning and losing investments for teachers?
Second, since NEA-sponsored state organizations are involved in selling investments and share in
the related compensation, their members serving as trustees overseeing public pension
investments may be conflicted in fulfilling their fiduciary duties.”
Finally, investment consultant Chris Tobe has concerns about annuities in retirement plans:
“The Biden Administration and U.S. Department of Labor, just yesterday, questioned the high risks
and high hidden “junk fees” related to annuity products in retirement plans. So, it’s clear, teachers
should demand transparency and low-cost investments in their retirement savings plans.”