Retirees shouldn't be surprised to hear that a pension check is so valuable that regulators are warning about the risks of schemes that promise a lump sum, if you sell off that income stream.

Ever hear of something called a "mirrored pension" that touts robust returns? If you're not careful, you could be looking at a "smoke and mirrors" kind of a deal.

Offers for upfront cash might sound tempting when budgets are tight. Maybe you do need a lump sum upfront immediately to cover a big medical bill. But think carefully before trying to get a settlement out of a regular pension, and do lots of research into various offers.

These deals are far more costly than many realize.

Or on the flip side, potential investors are being warned, too. In a time of ultra-low interest rates, new financial products pop up with big promises. A broker or financial adviser could pitch a financial product that supposedly is tied to an income stream. The promise is a high return, as an alternative to a low-paying CD. But connecting an investment to a structured settlement is risky and complex.

High yields in general come with high risks for investors - and considerable fees.

"Our fear is that people don't understand just how bad these deals can be," said Gerri Walsh, senior vice president for FINRA investor education.

And yes, some pushy salespeople are getting overly aggressive with elderly people about signing over their pensions. Retired government workers and retired members of the military are among those being targeted.

A "mirrored pension" or structured settlement shouldn't be confused with the one-time lump sum payouts that have been made to former retirees by their old employers, like the General Motors and Ford offers that first rolled out last year. These are different deals, and structured settlements are way more costly for consumers.

Leon LaBrecque, CEO of LJPR, a fee-only financial adviser in Troy, Mich., gave me one example. Take a 70-year-old with a $1,000-a-month pension.

A plan sponsor, such as an employer, looking to offer a lump-sum payout might offer a company's retiree something in the $140,000 range. By contrast, that same pension might only net about $75,000 in a structured settlement, LaBrecque said.

Structured settlements are promoted by outside salespeople.

A structured settlement includes high fees for brokerage commissions, legal fees and administrative charges.

"While a lump sum is appealing, you may well effectively be paying too much for that lump sum," Walsh said.

Walsh recommends talking to the plan sponsor to find out if opting for a settlement with a pension is even allowed under the plan.

Personal finance columnist Susan Tompor can be reached at