Retirement Heist: how companies plunder and profit from the nest eggs of American workers

Table of Contents

Title Page

Copyright Page

Introduction

CHAPTER 1 - Siphon: HOW COMPANIES PLUNDER THE PENSION PIGGY BANKS

CHAPTER 2 - Heist: REPLENISHING PENSION ASSETS BY CUTTING BENEFITS

CHAPTER 3 - Profit Center: HOW PENSION AND RETIREE HEALTH PLANS BOOST EARNINGS

CHAPTER 4 - Health Scare: INFLATING RETIREE HEALTH LIABILITIES TO BOOST PROFITS

CHAPTER 5 - Portfolio Management: SWAPPING POPULATIONS OF RETIREES FOR CASH AND PROFITS

CHAPTER 6 - Wealth Transfer: THE HIDDEN BURDEN OF SPIRALING EXECUTIVE PENSIONS ...

CHAPTER 7 - Death Benefits: HOW DEAD PEASANTS HELP FINANCE EXECUTIVE PAY

CHAPTER 8 - Unfair Shares: USING EMPLOYEES’ PENSIONS TO FINANCE EXECUTIVE LIABILITIES

CHAPTER 9 - Project Sunshine: A HUMAN RESOURCES PLOT TO DISSOLVE RETIREE BENEFITS

CHAPTER 10 - Twilight Zone: HOW EMPLOYERS USE PENSION LAW TO THWART RETIREES

CHAPTER 11 - In Denial: INCENTIVES TO WITHHOLD BENEFITS

CHAPTER 12 - Epitaph: THE GAMES CONTINUE

Acknowledgements

NOTES

INDEX

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First published in 2011 by Portfolio / Penguin, a member of Penguin Group (USA) Inc.

Copyright © Ellen E. Schultz, 2011

All rights reserved

LIBRARY OF CONGRESS CATALOGING-IN-PUBLICATION DATA Schultz, Ellen. Retirement heist: how companies plunder and profit from the nest eggs of American workers / Ellen E. Schultz. p. cm. Includes bibliographical references and index.

ISBN : 978-1-101-44607-2

1. Pensions—United States. 2. Corporations—Moral and ethical aspects—

United States. 3. Life insurance policies—United States. I. Title.

HD7125.S38 2011

331.25’20973—dc22

2011015064

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Introduction

IN DECEMBER 2010, General Electric held its Annual Outlook Investor Meeting at Rockefeller Center in New York City. At the meeting, chief executive Jeffrey Immelt stood on the Saturday Night Live stage and gave the gathered analysts and shareholders a rundown on the global conglomerate’s health. But in contrast to the iconic comedy show that is filmed at Rock Center each week, Immelt’s tone was solemn. Like many other CEOs at large companies, Immelt pointed out that his firm’s pension plan was an ongoing problem. The “pension has been a drag for a decade,” he said, and it would cause the company to lose thirteen cents per share the next year. Regretfully, to rein in costs, GE was going to close the pension plan to new employees.

The audience had every reason to believe him. An escalating chorus of bloggers, pundits, talk show hosts, and media stories bemoan the burgeoning pension-and-retirement crisis in America, and GE was just the latest of hundreds of companies, from IBM to Verizon, that have slashed pensions and medical benefits for millions of American retirees. To justify these cuts, companies complain that they’re victims of a “perfect storm” of uncontrollable economic forces—an aging workforce, entitled retirees, a stock market debacle, and an outmoded pension system that cripples their chances of competing against pensionless competitors and companies overseas.