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How Companies Plunder and Profit from the Nest Eggs of American Workers
Portfolio
September 2010
On Sale: September 15, 2010
256 pages
ISBN: 1591843332
EAN: 9781591843337
Hardcover
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Non-Fiction
"'As far as I can determine there is only one solution [to
the CEO's demand to save more money]', the HR representative
wrote to her superiors. 'That would be the death of all
existing retirees.'" It's no secret that hundreds of companies have been slashing
pensions and health coverage earned by millions of retirees.
Employers blame an aging workforce, stock market losses, and
spiraling costs- what they call "a perfect storm" of
external forces that has forced them to take drastic measures. But this so-called retirement crisis is no accident. Ellen
E. Schultz, award-winning investigative reporter for the
Wall Street Journal, reveals how large companies and the
retirement industry-benefits consultants, insurance
companies, and banks-have all played a huge and hidden role
in the death spiral of American pensions and benefits.
A little over a decade ago, most companies had more than
enough set aside to pay the benefits earned by two
generations of workers, no matter how long they lived. But
by exploiting loopholes, ambiguous regulations, and new
accounting rules, companies essentially turned their pension
plans into piggy banks, tax shelters, and profit centers. Drawing on original analysis of company data, government
filings, internal corporate documents, and confidential
memos, Schultz uncovers decades of widespread deception
during which employers have exaggerated their retiree
burdens while lobbying for government handouts, secretly
cutting pensions, tricking employees, and misleading
shareholders. She reveals how companies: • Siphon billions of dollars from their pension plans to
finance downsizings and sell the assets in merger deals • Overstate the burden of rank-and-file retiree obligations
to justify benefits cuts while simultaneously using the
savings to inflate executive pay and pensions • Hide their growing executive pension liabilities, which at
some companies now exceed the liabilities for the regular
pension plans • Purchase billions of dollars of life insurance on workers
and use the policies as informal executive pension funds.
When the insured workers and retirees die, the company
collects tax-free death benefits
*Preemptively sue retirees after cutting retiree health
benefits and use other legal strategies to erode their legal
protections. Though the focus is on large companies-which drive the
legislative agenda-the same games are being played at
smaller companies, non-profits, public pensions plans and
retirement systems overseas. Nor is this a partisan issue:
employees of all political persuasions and income
levels-from managers to miners, pro- football players to
pilots-have been slammed. Retirement Heist is a scathing and urgent expose of one of
the most critical and least understood crises of our time.
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