Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of American Workers
By Ellen E. Schultz
From The Jungle (1906) to The History of Standard Oil (1904) to Other People’s Money and How the Bankers Use It (1914), muckraking journalism and exposés have called attention to problems and often led to reform. People, it would seem, only pay attention even to injustices and crimes effecting them personally, when somebody dramatizes it and screams it from the rooftops.
So in the fine tradition of American muckraking, and realizing that the horse is at least three-quarters out of the barn already, we recommend Retirement Heist (2011) to you. Why aren’t Americans ready for their own exit from the workforce, probably unable to live a life of comfortable retirement, maybe will have find themselves looking for work in their Golden Years? While the reasons are many, here’s one of them: the disappearing guaranteed-for-life pension. And here is why that venerable and now mostly mystic thing is vanishing.
First, read Retirement Heist to understand how executives in corporations and their hired enablers and strategists, benefits consulting firms, use accounting tricks, legal loopholes, deception, and outright lying to rob people—maybe you—of their pensions.
Second, read it to understand how these same executives have and continue to transfer wealth, if you can call employee nest eggs that, from their workers to themselves to fund their ludicrously inflated pensions.
Third, read it to understand how executives are burdening their companies with huge unfunded deferred compensation packages that may prove costly to employees and investors in the future. And given recent trends, let’s include all taxpayers.
Fourth, read it to understand the new meaning of financial management and how executives use financial maneuvers to deceive not just their employees and government monitors but also investment analysts and investors.
As you start Retirement Heist, don’t immediately assume Schultz is talking about obviously shady operators. She’s talking about and citing the shenanigans of executives in corporations widely held by investors and leaders in their business sectors. Among those covered are AT&T, Bank of America, American Greetings, Cigna, Delta Airlines, IBM, the National Football League, and many more, perhaps your employer or stock investment among them.
Schultz writes clearly about even the most complex tactics and supplies plenty of examples to illustrate her points. After finishing, you will understand the games executives play with retirement and healthcare benefits, as well as their own compensation packages.
You’ll also find yourself extrapolating to other issues. For instance, under ERISA (Employee Retirement Income Security Act), while aggrieved employees or retirees may sue over pension disputes, they may not collect punitive or pain and suffering damages, just unpaid pension funds if they win. Sounds fair enough, except corporations typically drag these cases on for years until plaintiffs give up, exhaust their meager resources, or die. Bringing suit isn’t easy, though, because without a payoff of punitive and pain and suffering damages, finding representation is challenging. As you read the section on ERISA and thwarted suitor efforts, consider the effect tort reform might have in other areas of civil law. We love to malign tort attorneys but they can effectively police bad behavior; and it may not be in our best interest to cap judgments.
Finally, consider that the information in the book reflects an unsettling development in business; in particular, the way executives manage. Perhaps we’re a bit idealistic, however, as we see it, top management manages—or used to manage—for three broad constituencies: for the well being and prosperity of the company, to provide their markets with useful products and services, and for the general good of society as a whole. Of course, they weren’t always successful but, for the most part, they appeared to make an effort. Not so today. As Retirement Heist and other muckraking books illustrate, since perhaps the 1980s, top management has shifted the focus to themselves, managing for their own personal gain, often as Schultz and others show, to the determent of their companies, employees, and the economy at large. It’s a sad state of affairs that came to a disastrous head in 2008, and the situation isn’t at all better today. You really have to wonder how these corporate leaders face their own families after a day at the office. w/c