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AARP to Seniors: We're Not Accountable to You

The opinions expressed by columnists are their own and do not necessarily represent the views of
AP Photo/Haraz N. Ghanbari

Editor's Note: Jon Decker is the co-author of this piece. 

Last week, the AARP sent a letter to the Department of Labor requesting a delay of a Department of Labor proposal to align its rules for investment advisers with the SEC's "best interest" standard, to give investors more choices while protecting their retirement savings.


It's no surprise that the AARP would seek to thwart one of President Trump's policy objectives. Instead of being a neutral advocate for seniors, the AARP routinely engages in far-left political advocacy.  Recall that when seniors were contacting the AARP 14-to-1 urging the group to oppose Obamacare, they instead supported it. Since the law’s passage and implementation, the AARP has received well over $4 billion in “royalties” from its for-profit partner UnitedHealth, most of which comes from their exclusive sale of "AARP" branded UnitedHealth insurance plans.

There is some unique irony in AARP's latest foray into political activism. They are seeking to delay President Trump's retirement rules which are designed to replace an Obama administration regulation known as the fiduciary rule that was struck down in court.

Obama's so-called "fiduciary rule" was dubbed "Obamacare for your retirement" because, under his proposal, if you like your retirement plan or investment advisor, you may not be able to keep it. Estimates show that the rule would have disqualified up to 7 million IRA holders from receiving investment advice and cost consumers an eye-popping $31.5 billion.

Despite the fact that Obama's regulations amounted to an all-out war on seniors' retirement plans, the AARP – allegedly a seniors advocacy group – supported it due to their misguided belief that seniors aren't smart enough to plan for their own retirement. (We can't help but wonder if the Obama rule would have benefited AARP's corporate investment advisory partners.)


It is laughable that the AARP would call for the federal government to tell seniors how to manage their money – just look how the government manages its own!

But here's the real kicker. While the AARP wants to police retirement decisions by enforcing a "fiduciary rule" in an ill-fated attempt to protect seniors, the AARP recently got a lawsuit dismissed by claiming they themselves have no "fiduciary" responsibility to seniors whatsoever  – even though they are a seniors organization!

The lawsuit Krukas v. AARP alleged:

“AARP and UnitedHealth, together and through their respective subsidiaries, have orchestrated an elaborate scheme where AARP, as the de facto agent of UnitedHealth, helps market, solicit, and sell or renew AARP Medigap policies and generally administers the AARP Medigap program for UnitedHealth… AARP received ‘a 4.95% commission from every policy sold or renewed,’ id., which ‘constitutes an illegal kickback,’… AARP collects an illegal commission, acts as an unlicensed insurance agent, and materially misrepresents information about the 4.95% charge, all of which constitute violations of the CPPA and common law.”

Lawyers for AARP successfully got the case dismissed by arguing that there is no requirement for the AARP to “act with the interests of [seniors] in mind" and that "The relationship between a member and a membership organization is not one of ‘trust or confidence’ that creates a fiduciary duty.” Membership to the AARP “does not ‘transcend an ordinary business’ relationship.”


So while the AARP is clamoring for the federal government to enforce "fiduciary rules" on retirement investing, the organization refuses to hold itself to any fiduciary standard whatsoever.

If the AARP isn't accountable to seniors, why should anyone pay any attention to their advocacy?

Phil Kerpen is the president of American Commitment. Jon Decker is the executive director of American Commitment.

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