10 reasons that Pension Funding does not provide Pension Loans, but Pension Advances:
1) If source of pension (The Payer) defaults, the buyer does not seek payment from the pensioner personally. For example, assume a retired state of NY pensioner does not receive their monthly check from the state of NY (state defaults) or the federal government shuts down as happened in Oct and Nov of 2013 our contract states that the pensioner is not liable to make future payments unless or until the pension payer resumes payments to the pensioner. Therefore this is not a loan, rather it is a pension advance, a sale.
2) If the pensioner dies, the buyer does not seek payment from the pensioner’s estate. Like item #1, if the pensioner does not receive their income streams due to their own death, the estate is not liable to make future payments. Again, this is the premise of a sale, not a loan.
3) The sale of an income stream does not affect one’s credit score. This is very advantageous to the pensioner. Unlike any loan, there is no mention of the sale on their credit report. Additionally, any default on income streams payments is not reported to credit bureaus.
4) This transaction is an installment sale, not a loan. We are trading/exchanging one specific whole asset for another. The trade is cash for 8 years of monthly income. There is no “LTV” protection typical of loans. For example, a bank might make a loan against a home requiring 20% recourse protection (the down payment). With our installment sale there is no “down payment protection”, it is simply trading one asset for another. 99% of all loans are assets based (home, car boat, etc).
5) All transactions are fixed 8 year commitments, just like 8 year installment sale or an immediate annuity. In fact, our program is considered an 8 year immediate annuity or private annuity.
6) No bank would provide a loan against an unsecured income especially given income streams’ historically high default rate. Please see the letters from our pensioners confirming their bank’s unwillingness to loan to pensioner. Not “loan like”.
7) Our contract states that the pensioner can increase the value of their income stream with various incentives such as giving us a referral. This is in contrast to a loan, that does not have incentive clauses.
8) No lender’s license is needed to sell immediate annuities, private annuities, structured settlements or installment sales. These are not considered loans and as such no license is needed.
9) Structured settlements, installment sales and private annuities have not been classified as loans. The pension income streams falls into this same category.
10) The language in the docs characterizes the transaction as a sale.
Structured settlements and lottery winnings have been sold for over 20 years. 41+ states have set forth structured settlement regulations. And no state requires that the IRR to the seller be less than the usury rate (implying that the sale of this secured income stream is not a loan). Structured settlements are approved by judges who routinely allow for a discount rate greater than that state’s usury rate. Private annuities also have been a key estate planning tool and never have they considered to be subject to usury laws.