One of America’s leading retirement litigation law firms is investigating the National Education Association, the nation’s largest teachers union, for putting its seal of approval on what sounds like a really lousy retirement plan. The question is why the union did it: “Keller Rohrback is evaluating whether the NEA endorsed the program because of the payments, as opposed to a prudent evaluation of whether the plan is in the best interests of NEA members.”

Bestowing the NEA’s endorsement is worth tens of millions of dollars for the union budget, even though its official Valuebuilder program isn’t a value for its members. A 2006 Los Angeles Times exposé on union benefit plans found that the NEA “collected nearly $50 million in royalties in 2004 on the sale of annuities, life insurance and other financial products it endorses.” And what do its members get? “Buyers of an NEA-endorsed annuity sold by Security Benefit Life Insurance Co. pay annual fees totaling at least 1.73% of their savings. That is about 10 times as much as they would pay in 403(b) plans available from Vanguard Group, T. Rowe Price and other low-cost mutual fund providers. The costliest option in the NEA-endorsed plan charges 4.85% a year. That means an investor would have to earn a return of nearly 5% just to break even.”

An Ohio retirement planner told the Times: “The nature of the [union retirement fund] marketplace is such that you have these little under-the-table payments, or whatever you want to call them, and a good-old-boy network that really works against the teachers.” After profiling one teacher whose union-endorsed annuity earned one-fifth the return of her boyfriend’s 401(k), the Times wrote: “Public-school teachers across the country are in similar predicaments. And many have their unions to thank for it.”