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Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of American Workers
- October 26th, 2011
Ellen Schultz. Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of American Workers. Portfolio/Penguin. 2011. 245 pages.
The news is full of stories about how private-sector retiree pensions and health insurance plans are in financial trouble. This book explains how the companies themselves played a big role in draining these plans.
Businesses blame the aging workforce and spiraling health care costs as they slash pensions and health coverage for their retirees. Written by an investigative journalist for the Wall Street Journal, Retirement Heist describes how the companies systematically boosted profits at the expense of their retiree benefits. In 1999, company pensions had billions in excess assets -- enough to cover generations of employees -- but companies were able to find loopholes and use accounting maneuvers to siphon that money for their own profit. Retirement Heist documents how companies:
- withdrew money from pension plans, leaving the pensions with insufficient funds to cover a down market;
- used pension funds to pay executive departure bonuses and award lavish pensions;
- cut retiree benefits in order to post gains;
- exaggerated health care liability in order to phase out retiree health care plans; and
- took life insurance out on employees and used the tax-free death benefits as income.
Retirement Heist is a comprehensive and thought-provoking expose that provides insight into how corporations work for their own benefit, often at the expense of their employees.
For a detailed discussion by Reuters retirement writer Mark Miller of the book's charges and implications, click here.
Last Modified: 10/26/2011