Prudential, anyone?

My husband is retiring and he's looking for a new home for his annuity. His nephew rolled over his annuity to Prudential and is happy with them, so my husband made an appointment with a Prudential rep to discuss his annuity with them.

Does anyone have any experience with Prudential? I looked at their financials, they appear to be healthy. Thanks.

I think that is all any of us can do.

Talk to your local banker. Talk to a credit union. Talk to a tax lawyer. Talk to a CPA.
Google the name of each company along with "lawsuits", "class actions", and "complaints". Be very clear about the various fees involved, as well as the tax consequences.

Your nephew is probably too young to be retired, so likely has different financial goals than your husband.

As a spouse, you also have an interest in financial arrangements - particularly if you end up in a caregiver situation for your husband. Most couples by retirement age have each other's power of attorney - a necessary protection for when one of you becomes physically or mentally incapacitated before the other.

The agents who market these annuities - and this is true for most companies, not just Prudential - are extremely aggressive in pushing their products to friends, neighbors, relatives, members of their churches,etc. They have glib sales pitches. Do you know the phenomena of people looking at different models of cars? Once they have bought one, they become MORE enthusiastic about their choice - needing to convince themselves they made the best decision. Your nephew may be happy, but what does that prove? How experienced is he in the financial arena? Was this the only time he ever rolled over an annuity? How did he hook up with this agent? Was the agent a friend of a friend, or some kind of social contact? How many companies' prospectuses did he review before choosing Prudential? What made Prudential better?

Whatever company you select, you are very dependent not only on the integrity of that company's business practices, but on the competence of the agent. Is the agent just starting out and struggling to make a living? What if he quits and your account is reassigned to a stranger - possibly a brand new and inexperienced agent. What if the agent is older and retires?

There have been individual complaints and class actions against Prudential for hanging onto money for more than a year before rolling it over. The result was that the customer ran afoul of IRS time limits for rolling over moneys without penalty, and ended up in a higher tax bracket. And of course Prudential is notorious for ripping off military families of soldiers who died in Iraq. Specifically, Prudential delayed payouts on life insurance policies for more than 5 years, and meanwhile made nearly 6% Interest, but paid the families only 1 percent interest.
http://newshawksreview.com/prudential-sued-over-interest-payments-to-veterans/41101/
Prudential Sued over Interest Payments to Veterans
By Charles Lindy on Aug 11 2010

Prudential Insurance, a unit of the Prudential Finance group, has been sued over payments made to policy holders. These payments are based on interest that was earned by the company. The suit claims that Prudential received over 5% interest rate on veterans life insurance policies but only paid out 1% to the policy holders.

The lawsuit is seeking class action status and hopes to bring to light the practices of the large insurer. The start of this suit was brought by Kevin and Joyce Lucey, whose son served in the armed forces. They were holders of their son’s $250,000 life insurance policy. Their son died in 2004 and they were paid $53,000 at the time of his death. Not until 2009 were the remaining funds paid in the amount of $197,000.

Lawyers representing the Luceys and other clients have said that Prudential is receiving interest payments on money that does not belong to them. They are seeking the return of all money accrued through this practice to the clients they represent.

The Department of Veteran Affairs has agreed to launch a full investigation into the allegations brought against Prudential. According to a report by the department, Prudential collected $982 million dollars in policy premiums in 2004 as well as $144 million in investment income with $2 billion in reserves.
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http://www.smashtheman.com/2010/09/news/families-of-dead-u-s-vets-accuse-prudential-of-massive-scam
Families of Dead U.S. Vets Accuse Insurer of Massive Scam

SAN FRANCISCO, California, Jul 31, 2010 (IPS) – Prudential cheated the families of dead U.S. soldiers and Marines out of more than 100 million dollars in interest on their life-insurance policies, according to a lawsuit filed Thursday in a Massachusetts federal court.

The suit, brought by the parents of two veterans who committed suicide after returning home from Iraq, came as the Pentagon, the Department of Veterans Affairs and New York Attorney General Andrew Cuomo all announced investigations into the allegations, first disclosed by Bloomberg Markets magazine this week.

“We want the government and the business world to understand that they need to stop the policy of profiting off the deaths of our loved ones,” said one of the plaintiffs, Kevin Lucey, whose son, former Lance Cpl. Jeffrey Lucey, hanged himself on Jun. 22, 2004, after returning home from his first tour.

According to the lawsuit, Prudential paid more than 1.2 billion dollars in death and traumatic injury claims in 2009 alone, earning interest income on nearly every claim. The plaintiffs say Prudential has kept more than 100 million dollars that should have gone to veterans’ families.

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Lots of stuff to consider. I rolled my meager savings over into a variety of IRAs through my Credit Union. I've dealt with them for decades and they have always given good and honest service to their members.

We will look elsewhere!