The mystery took more than a month to solve. Somebody sent retired schoolteacher Louise Michael of Hurst a yellow postcard warning that her retirement savings are "at significant risk unless you ask soon to prevent it."
The postcard looked official enough:
"This document is on record as being sent to you," it stated.
"FIRST NOTICE ... This document is intended solely for the addresses listed and should be viewed by the aforementioned only" -- even though it was only a postcard.
"Official Mail -- Penalty for Tampering."
The return address was no help at all: "Important Teacher Notice, Ft. Worth, TX 76137." The postmark, however, was from Austin.
On the back, the postcard warned about Internal Revenue Service rule changes to "your teachers 403(b) TSA [tax-sheltered annuity] retirement savings plan." If Michael wanted to learn more, she had to call a toll-free number.
"I didn't know if it was for real or what," Michael said.
Her husband, Ed, who sent the card to me, said, "I felt something was screwy with it."
First, I called the number and listened to a recording, but the original sender was never identified. I was asked to leave my name and address to get more information.
I did, but weeks went by and I received nothing.
Called again and left my information a second time.
Then a brochure arrived in the mail. The title, "Navigating the new IRS 403(b) TSA retirement plan rule change." The sender was finally identified -- William Hackley. In small type was a company name: U.S. Retirement & Financial Group. But it wasn't clear what Hackley was selling.
When I called Hackley's number, I listened to another voice recording, but I couldn't reach him. And I couldn't find the company's website using two major search engines.
Finally, I found it, but in an unusual way. Hackley had placed an ad for an administrative assistant on Craigslist. His company website and e-mail address were listed for job applicants. I sent another message.
Hackley returned my call, and I finally got my answer. Hackley, a benefits adviser, sells a product called an equity-indexed annuity to teachers and others who have used the 403(b) retirement plans to put money away tax-free for retirement. A year ago, IRS rules took effect that changed the way school districts handle the plans with third-party administrators.
Why all the mystery?
He explained: "From a marketing standpoint, it's better to do it that way. It's not deceptive."
Others disagree.
Jerry Hagins of the Texas Insurance Department said: "A postcard like this does raise some red flags with us. It's not clear what the product is that he's offered. Second, there does seem to be some high-pressure language in it. That's also a red flag.
"It's not good for your own business if you're making consumers work that hard to figure out what you're offering."
Dick Powell, a retirement benefits specialist with the United Educators Association of Texas, said: "In my opinion, the postcard was deceptive. ... Teachers that called me were afraid they were going to lose their money. One said she had been worried for days that she was going to lose her money. I said, 'You take that postcard and you throw it in the trash.' She said, 'You just saved me.'"
Cecile Russell, a benefits consultant who worked with the IRS to distribute an information packet explaining the rule changes to 15,000 school superintendents nationwide, said: "I'm very familiar with this type of marketing. It is deceptive in nature. ... This gets my blood boiling when I see these kinds of things.
"The postcard itself is providing tax advice that misinterprets changes in federal tax laws. ... You can't lose your money because of the rule change."
The investment product itself requires careful consideration, said Robert Elder of the Texas State Securities Board.
"People should be very careful with equity-indexed annuities because they often include sales commissions, annual administrative costs and ongoing fees that are substantially higher than mutual funds," he said. "Annuities in general are very complex products. Transparency is not a very strong point with most annuity products."
Hackley said his postcard is accurate and not deceptive.
"No tax advice is ever given. I'm not a certified public accountant. We don't give tax advice. That's not the point of the postcard. The purpose of the postcard is to allow people to know what the rule change was and how it could potentially affect that individual. It has nothing to do with taxes."
He says he wants teachers to invest in equity-indexed annuities because it's "safe money" that doesn't lose value because it's not based on the ups and downs of the stock market.
"You move out of risk into no risk," he said.
He acknowledged, "I get paid a commission."
Under the rule change, teachers' plans that were administered by school districts are now overseen by approved third-party administrators.
The postcard, Hackley said, is "informing people that there are alternatives."
He continued: "I pride myself with my ethics and my morals, and that's why I am in the business that I am in. I am not in the risk business. I like getting phone calls from clients that tell me, 'Thank you very much for putting this portion of my portfolio at no risk.'"
However, he added, he won't send out more postcards.
Why?
"The postcards don't work."
The Watchdog column appears Fridays and Sundays.
Dave Lieber, 817-685-3830
Twitter @DaveLieber
Comments