In the last several years, there have been a rash of “Reverse Pension” plan programs surfacing all over the place online. Are they real or just another scam? Are RPPs the “prime bank” scams of the 21st century that plagued us during the 90s? First we will define the familiar spiel in what these programs state they are and what the current facts are. You will have to decide if the risk and reward are worth taking.This is how the majority of the programs say how it works.

For a small membership fee, usually between $35 - $50, you have the opportunity to receive between $55,000 to $100K+ dollars in return. How you ask? It is through some private investor, venture capitalist or Trust partner that works with an insurance company. Your small fee is just a membership fee for the administrator (website) that brings this program forward. At the completion of the sign up process, anywhere between 10,000 members to over 100,000 members depending on the program; the third party purchases an insurance policy (pension policy) on your behalf and pays for it. You in return, sign over this policy to the “investor” to collect when you retire. They pay you upfront a lump sum or percentage of the total payout that you would have received when you do retire.

Let’s say for example, the policy is for $200,000 when you reach retirement age. The “investor” gives you $55,000 upfront and they collect $145,000 when the policy matures. This is seems very logical at first glance, but leaves many questions unanswered. (And most of these “admins” don’t seem to answer when pressed with these questions.) First of all, we do not know the premium that is paid for this policy. If you were to purchase this policy on your own, you would usually pay a monthly premium up until your retirement age before you collect. There are certain plans that work like an annuity, in which a large sum is paid upfront and interest is accrued until retirement. Both scenarios brings forth a big gaping hole in these programs.

Take on average a 30 year old. If the monthly premium is $50. That is $21,000 dollars in payments until retirement at 65 years of age. For the sake of simplicity, the same $21,000 (usually more) in the annuity method is paid upfront for a $200,000 payout at retirement. It begs the question why would a private investor, venture capitalist or Trust partner participate in such a program where the returns years down the road is short of profitable?

First of all, they pay you $55,000 (not to mention the referal fees that some of these programs pay) + $21,000 premium (which more than likely much higher). Their returns would be $200K - 76K = $124K or less with referral payouts after 35 years. Adjusted for inflation, this amount is worthless. If they took the same $76K and put it in a money market that earns 5% a year over 35 years, that would make them over $400K. Multiply that with the number of policies that these programs are supposedly geared for, 10,000 to 150,000, that is alot of money.

This leaves one very unsettling question. Are these “investors” really that stupid or is it really a scam on the part of the “admin” and program originators in collecting the “membership” fees? One hundred thousand members times $50 is alot of money collected. Even after referral fees are accounted for. If half goes to referrals, that leaves about $2.5 million going to someone.

Of course the supporters of these programs will say, the “investors” in these policies will “mortgage” or sell these policies to others. They may even get leverage for these policies to get more money with to invest in. Well, if they mortgage or sell these policies, they will have to sell it at a discount for another “investor” to profit in. Secondly, why would they need to leverage these policies to get money to invest, when they had all the money to begin with? 100,000 policies time $76,000 out of pocket is no chump change to begin with.

We have given you our take, you will have to decide if you are averse to the risks. Fifty bucks may be small change, and these admins want to convince you that it is, but look at the numbers as to why they want you to believe that. They stand to make millions from all the little small payments. Here are some facts to ponder before you send in your hard earned money.

1. Not one shred of proof that any of these programs has paid out.
2. The oldest of these programs, E65 has not paid out in over 5 years. One delay tactic after another.
3. ICC (Now Capital Preservation Society) has completed enrollment and not paid out.
4. GPP(Global Pension Plan) has completed enrollment, starting delay tactics..DDOS, internal sabotage etc.
5. PWW stalled with legal issues.
6. New programs like HCI25, Early Retirement, and Imperial Invest coming out with new twists and enticements. HCI25 giving out cars as prizes (no proof of winners). In the case of Imperial Invest, they are giving you a 80K loan to invest with. (Why don’t they just use the 80K and invest without having the hassles to dealing with you?)

Buyer beware and do your own due diligence.