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Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of American Workers
"'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.
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.
256 pages, Hardcover
First published September 15, 2011
33 people are currently reading
614 people want to read
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April 19, 2016
“‘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.'”
Ellen Shultz, excerpt from Retirement Heist
It’s got a catchy title – Retirement Heist.
Now take a second look – Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of American Workers.
I first heard about Ellen Schultz, an award-winning investigator reporter for the Wall Street Journal and author of Retirement Heist, when she was interviewed by Jon Stewart. Her arguments were compelling; her resolve impervious to any who would challenge her findings. Indeed, there have been responses from at least one of the named corporations, but her refutations have been swift and candid. She is a woman on a mission. Her message is direct and unambiguous. Corporations have deliberately deceived their employees and Congress to profit from worker’s pensions.
Think the worst and it is even worse than you can even imagine. This is not a book that you can read during one sitting because of the emotional drain that comes from reading the stories of men and women who have given the best to their companies. But it is a book that must be read, remembered, discussed and understood.
Ellen Shultz is brilliant. In fact, she received the 2012 Helen Bernstein Book Award for Excellence in Journalism for Retirement Heist. Her acknowledgements at the end of the book were poignant and generous. She praised the remarkable people who continue to work tirelessly to save the pensions of literally thousands of seniors.
I read Retirement Heist from cover to cover, marveling at the detailed research that went into every page. This is Ellen Shultz’s labour of love and compassion.
https://ontheroadbookclub.com/2013/04...
Ellen Shultz, excerpt from Retirement Heist
It’s got a catchy title – Retirement Heist.
Now take a second look – Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of American Workers.
I first heard about Ellen Schultz, an award-winning investigator reporter for the Wall Street Journal and author of Retirement Heist, when she was interviewed by Jon Stewart. Her arguments were compelling; her resolve impervious to any who would challenge her findings. Indeed, there have been responses from at least one of the named corporations, but her refutations have been swift and candid. She is a woman on a mission. Her message is direct and unambiguous. Corporations have deliberately deceived their employees and Congress to profit from worker’s pensions.
Think the worst and it is even worse than you can even imagine. This is not a book that you can read during one sitting because of the emotional drain that comes from reading the stories of men and women who have given the best to their companies. But it is a book that must be read, remembered, discussed and understood.
Ellen Shultz is brilliant. In fact, she received the 2012 Helen Bernstein Book Award for Excellence in Journalism for Retirement Heist. Her acknowledgements at the end of the book were poignant and generous. She praised the remarkable people who continue to work tirelessly to save the pensions of literally thousands of seniors.
I read Retirement Heist from cover to cover, marveling at the detailed research that went into every page. This is Ellen Shultz’s labour of love and compassion.
https://ontheroadbookclub.com/2013/04...
February 3, 2012
I read Retirement Heist because I like to read books that I feel are important to read like The Ripple Effect, Omnivore’s Dilemma, Fast Food Nation, etc. Nonetheless, the habit is very often very depressing and Retirement Heist is no exception.
If there is any common theme in those books it is corporate greed is something that can be counted on like death and taxes. When choosing between profits and doing the right thing, big companies will choose the bottom line every time. It is one thing when big companies are simply negligent about the environment or consumers’ health because they are not important to a company’s profitability, but in Retirement Heist companies are so consistently calculating in their efforts to bilk their own employees out of hard earned pensions that it is particularly heartbreaking. The book is particularly resonant now of course during this Presidential race and what with the Occupy Wall Street movement, the 99% vs. 1% outlook and the “class warfare” term constantly thrown around by Republicans.
The author, Ellen Schultz, does an excellent job of distilling all the information and communicating it in a way that anyone can follow. The results are astonishing. Companies when bought and sold to each other use pension assets (often overfunded at the time) as bargaining chips to enhance the value of the sale rather than a liability owed to employees. Once the transaction takes place and a new company owns the pensions assets, the subterfuge is much easier to inflict on those same employees.
The fact that companies would do things like move money from regular pensions and reallocate it to executive compensation, cut benefits to employees because of imaginary “spiraling pension costs”, layoff employees because it stops their pension clocks, reduce and reallocate pension assets to younger employees because it does not reduce the overall pension plan (legal under ERISA rules), and preemptively sue their retired employees over reduced pensions to avoid collective class action suits is ridiculous. The fact that it is all “legal” because of the loopholes these companies hire benefits consultants to find and exploit, or because of the money companies pay lobbyists to get the government rules to work on their behalf, gives the impression the little guy has no chance.
And that of course is why the book is ultimately depressing. After reading the book you certainly do not get the impression that any of these practices are going to change, and Ms. Schultz does not provide any suggestions for possible solutions. If anything, and ultimately why the book I feel is so important, it still makes the reader better informed to help protect his or her own individual retirement plan.
If there is any common theme in those books it is corporate greed is something that can be counted on like death and taxes. When choosing between profits and doing the right thing, big companies will choose the bottom line every time. It is one thing when big companies are simply negligent about the environment or consumers’ health because they are not important to a company’s profitability, but in Retirement Heist companies are so consistently calculating in their efforts to bilk their own employees out of hard earned pensions that it is particularly heartbreaking. The book is particularly resonant now of course during this Presidential race and what with the Occupy Wall Street movement, the 99% vs. 1% outlook and the “class warfare” term constantly thrown around by Republicans.
The author, Ellen Schultz, does an excellent job of distilling all the information and communicating it in a way that anyone can follow. The results are astonishing. Companies when bought and sold to each other use pension assets (often overfunded at the time) as bargaining chips to enhance the value of the sale rather than a liability owed to employees. Once the transaction takes place and a new company owns the pensions assets, the subterfuge is much easier to inflict on those same employees.
The fact that companies would do things like move money from regular pensions and reallocate it to executive compensation, cut benefits to employees because of imaginary “spiraling pension costs”, layoff employees because it stops their pension clocks, reduce and reallocate pension assets to younger employees because it does not reduce the overall pension plan (legal under ERISA rules), and preemptively sue their retired employees over reduced pensions to avoid collective class action suits is ridiculous. The fact that it is all “legal” because of the loopholes these companies hire benefits consultants to find and exploit, or because of the money companies pay lobbyists to get the government rules to work on their behalf, gives the impression the little guy has no chance.
And that of course is why the book is ultimately depressing. After reading the book you certainly do not get the impression that any of these practices are going to change, and Ms. Schultz does not provide any suggestions for possible solutions. If anything, and ultimately why the book I feel is so important, it still makes the reader better informed to help protect his or her own individual retirement plan.
May 25, 2017
s good as this book is , it is difficult to review.
For over twenty years corporations have employed numerous means, from the merely mean spirited to the deliberately illegal to convert retirement systems into income for the few. Clearly, one of the reason why the corporate right is so afraid of the term "income redistribution" is that they have to demonize the term even as they focus on "income distribution" meaning the ongoing process of pushing ever more of the planet's wealth into ever fewer hands. Somehow the same Americans who take pride in not believing corporation advertisements, eat up every word the same corporations pump-out when the subject is regulations, anti-unionism or just delivering on the promise of trickle-down.
This book details some of the more smarmy efforts that have been employed to "Profit and Plunder form the Nest Eggs of American Workers". To repeat them here is to emphasize my politics over the reading experience inherent to the book.
The book itself is a fairly easy read. Some explanations are complex, but even if you miss the details you can grasp the import of the concept. Others have noted that this book should have some examples of the equations used in tax law or determining retirement benefit amounts. This is a valid point. My suggestion that they should be in an annex, leaving the less technically adept reader with an uninterrupted read.
This helps to emphasize that this is not a technicians book. The irony here is that recounted examples of employees fighting back frequently revolve around individuals who had or learned the arcane ways of retirement calculations. In the case of IBM, the assumption by leadership that employees were not skilled in this type of problem solving was as ridicules as it sounds and cost IBM leadership more than some discomfort.
Given the tone of the national political debate, it may be that political right will ignore this book in droves. For those who want to hear more than what is already in their respective political echo chambers, this is a book to read before you vote.
Some one else has said it in an Amazon review: Corporations Bad, People Good. This is a valid summery. If you want examples, without getting drowned in the math, this is a good book.
For over twenty years corporations have employed numerous means, from the merely mean spirited to the deliberately illegal to convert retirement systems into income for the few. Clearly, one of the reason why the corporate right is so afraid of the term "income redistribution" is that they have to demonize the term even as they focus on "income distribution" meaning the ongoing process of pushing ever more of the planet's wealth into ever fewer hands. Somehow the same Americans who take pride in not believing corporation advertisements, eat up every word the same corporations pump-out when the subject is regulations, anti-unionism or just delivering on the promise of trickle-down.
This book details some of the more smarmy efforts that have been employed to "Profit and Plunder form the Nest Eggs of American Workers". To repeat them here is to emphasize my politics over the reading experience inherent to the book.
The book itself is a fairly easy read. Some explanations are complex, but even if you miss the details you can grasp the import of the concept. Others have noted that this book should have some examples of the equations used in tax law or determining retirement benefit amounts. This is a valid point. My suggestion that they should be in an annex, leaving the less technically adept reader with an uninterrupted read.
This helps to emphasize that this is not a technicians book. The irony here is that recounted examples of employees fighting back frequently revolve around individuals who had or learned the arcane ways of retirement calculations. In the case of IBM, the assumption by leadership that employees were not skilled in this type of problem solving was as ridicules as it sounds and cost IBM leadership more than some discomfort.
Given the tone of the national political debate, it may be that political right will ignore this book in droves. For those who want to hear more than what is already in their respective political echo chambers, this is a book to read before you vote.
Some one else has said it in an Amazon review: Corporations Bad, People Good. This is a valid summery. If you want examples, without getting drowned in the math, this is a good book.
April 30, 2018
While this was a disturbing rabbit hole to go down, the FIRE (Finance, Insurance, Real Estate) sector's pillaging makes a lot more sense when exploring Michael Hudson's "Killing the Host" and "J is for Junk Economics".
Even Classical economists recognized these sectors profit immensely from "unearned income" (land/monopoly rent, financial usury), acting as parasites on labor and industry by increasing the cost of living and doing business. Classical economists wanted to "free the market" from this kind of Feudalism.
This is such baseline analysis that it was shared by the likes of Adam Smith, Karl Marx on the left and Henry George on the right; mainstream economics (Neoclassical) has been a triumph of Wall Street financial feudalism...
Even Classical economists recognized these sectors profit immensely from "unearned income" (land/monopoly rent, financial usury), acting as parasites on labor and industry by increasing the cost of living and doing business. Classical economists wanted to "free the market" from this kind of Feudalism.
This is such baseline analysis that it was shared by the likes of Adam Smith, Karl Marx on the left and Henry George on the right; mainstream economics (Neoclassical) has been a triumph of Wall Street financial feudalism...
July 27, 2018
This author goes through and extensively shows that defined benefit plans (where the employer promises to provide a certain benefit through retirement) is prone to mismanagement because the employer has competing interests (minimizing cost) versus their former employees (getting maximum benefits). However, she doesn't actually propose a solution, which is annoying.
Furthermore, she seems to dismiss defined contribution options (like the employer putting money directly into your 401K), even though this would eliminate the conflict. The employer would incur all of their liability while you are working for them, rather than carry the liability on their books for decades, when you no longer work there and therefore have no leverage. Why she dismisses with practically no discussion the most practical fix to the competing interest problem that she so carefully documents is a complete mystery to me. At the end, I feel like she was unable to identify (or at least articulate) the root cause of the problem: companies who defer liabilities until after their employees retire no longer have an incentive to keep those retirees happy. Therefore, make sure that they pay all of their compensation up front, rather than allowing them to defer it.
Furthermore, she seems to dismiss defined contribution options (like the employer putting money directly into your 401K), even though this would eliminate the conflict. The employer would incur all of their liability while you are working for them, rather than carry the liability on their books for decades, when you no longer work there and therefore have no leverage. Why she dismisses with practically no discussion the most practical fix to the competing interest problem that she so carefully documents is a complete mystery to me. At the end, I feel like she was unable to identify (or at least articulate) the root cause of the problem: companies who defer liabilities until after their employees retire no longer have an incentive to keep those retirees happy. Therefore, make sure that they pay all of their compensation up front, rather than allowing them to defer it.
April 5, 2023
Although this book was written in 2011 it is still timely. If anything, the abuses and exploitation of loopholes it describes and explains clearly to a reader not savvy in financial legalese have likely only gotten worse.
November 17, 2011
Whether you have a pension or a 401(k), or you are an analyst or an investor or a concerned citizen this important book exposes some of the myths and deceits that corporations employ to reduce pension benefits and rejigger them to favor highly compensated executives as well as their balance sheets. Ms. Shultz explains how pension funds have been transformed from rightfully earned compensation for large swaths of employees into piggybanks plundered to inflate earnings, create tax shelters, pay for layoffs, and finance wild pay packages and benefits for small numbers of executives. This is all while corporations find myriad ways to hide ballooning executive liabilities beneath a rhetoric of 'spiraling health costs' (almost none of which, Ms. Schultz rightly points out, corporations are in fact liable for) and 'belt-tightening' which they disingenuously cry publicly are hurting their bottom line and forcing them out of the US market.
Quite a straightforward read and very clearly explained are the policies and plans at stake, so much so that even someone with zero background in executive compensation and employee benefits can understand the various tactics outlined in this book and in play throughout America. Including stories from a vast cross-section of retirees as diverse as the United Auto Workers to the National Football League, Schultz uses thoroughly vetted factual anecdotes to highlight the lengths and lows that some pension experts and consultants are willing to go at the behest of their clients to deny rightful coverage and compensation.
One illustration: Ms. Schultz analyzes the effectiveness of legal attrition corporations wage against elderly employees, cutting benefits in the hope that prolonged legal battles will ultimately be much cheaper than paying deserved benefits, even while knowing full well they are in the (legal and moral) wrong. It is quite simple: if the plaintiff dies of black lung in the meantime, guess who wins? And it is quite convenient that the fees for these armies of lawyers come from the pension pool itself, while elderly and often medically frail retirees are left to their own wits to battle for their hard earned compensation.
A striking tale of straightforward greed and lies as well as the unhealthy compensation structures which emphasize short-sighted balance sheet tricks to increase bonuses and incentive pay that is in effect for much of corporate America, this book should be a wake up call to employees of all stripes as well as politicians and citizens worried and complaining about tax loopholes, Social Security and Medicare.
Quite a straightforward read and very clearly explained are the policies and plans at stake, so much so that even someone with zero background in executive compensation and employee benefits can understand the various tactics outlined in this book and in play throughout America. Including stories from a vast cross-section of retirees as diverse as the United Auto Workers to the National Football League, Schultz uses thoroughly vetted factual anecdotes to highlight the lengths and lows that some pension experts and consultants are willing to go at the behest of their clients to deny rightful coverage and compensation.
One illustration: Ms. Schultz analyzes the effectiveness of legal attrition corporations wage against elderly employees, cutting benefits in the hope that prolonged legal battles will ultimately be much cheaper than paying deserved benefits, even while knowing full well they are in the (legal and moral) wrong. It is quite simple: if the plaintiff dies of black lung in the meantime, guess who wins? And it is quite convenient that the fees for these armies of lawyers come from the pension pool itself, while elderly and often medically frail retirees are left to their own wits to battle for their hard earned compensation.
A striking tale of straightforward greed and lies as well as the unhealthy compensation structures which emphasize short-sighted balance sheet tricks to increase bonuses and incentive pay that is in effect for much of corporate America, this book should be a wake up call to employees of all stripes as well as politicians and citizens worried and complaining about tax loopholes, Social Security and Medicare.
August 12, 2016
This book talks about the many different ways companies have found to take assets from pension funds.
For example, in 1987 the accounting standard FAS 87 began requiring companies to show the future costs of employee pension benefits on their earnings statements. This was a game-changer. This gave companies an incentive to reduce pension costs and a tool to manipulate earnings. Suddenly, the $1 trillion that companies owed three generations of employees and retirees for pensions and retiree health benefits became potential earnings enhancements. In 1999 IBM cut pension benefits resulting in a saving of $450 million of which $200 million was taken as a gain on 1999 income.
Julia D'Souza of Cornell studied hundreds of companies that converted their pensions to cash balance and found that the average incentive compensation of the CEO jumped from three times salary to four times salary the year of the change. Pay of CEOs who did not change pension plans did not change. “You could have real economic wealth transfers away from employees”. The desire for earnings from pension plans also drove a change in the asset mix of pension plans from 47% stock in 1990 to 60% stock in the 1999. A study by Patricia McConnell of Bear Sterns found in 1999 that 3% of the operating income of S&P 500 companies came from pension income. Companies manipulate the pension assumptions such as investment return to allow them to meet earnings targets. In 2000 and 2001 IBM raised its pretax income by 5% by raising its assumed investment return from 9.25% to 10%.
In 2003 Lucent cut healthcare, dental coverage, death benefits, coverage for spouses and Medicare Part B premiums for non-union retirees. Labor contracts prevented cuts to benefits of union retirees. The savings of $464 million offset the $422 million obligation for the special supplemental pensions and retirement benefits for executives.
For example, in 1987 the accounting standard FAS 87 began requiring companies to show the future costs of employee pension benefits on their earnings statements. This was a game-changer. This gave companies an incentive to reduce pension costs and a tool to manipulate earnings. Suddenly, the $1 trillion that companies owed three generations of employees and retirees for pensions and retiree health benefits became potential earnings enhancements. In 1999 IBM cut pension benefits resulting in a saving of $450 million of which $200 million was taken as a gain on 1999 income.
Julia D'Souza of Cornell studied hundreds of companies that converted their pensions to cash balance and found that the average incentive compensation of the CEO jumped from three times salary to four times salary the year of the change. Pay of CEOs who did not change pension plans did not change. “You could have real economic wealth transfers away from employees”. The desire for earnings from pension plans also drove a change in the asset mix of pension plans from 47% stock in 1990 to 60% stock in the 1999. A study by Patricia McConnell of Bear Sterns found in 1999 that 3% of the operating income of S&P 500 companies came from pension income. Companies manipulate the pension assumptions such as investment return to allow them to meet earnings targets. In 2000 and 2001 IBM raised its pretax income by 5% by raising its assumed investment return from 9.25% to 10%.
In 2003 Lucent cut healthcare, dental coverage, death benefits, coverage for spouses and Medicare Part B premiums for non-union retirees. Labor contracts prevented cuts to benefits of union retirees. The savings of $464 million offset the $422 million obligation for the special supplemental pensions and retirement benefits for executives.
September 4, 2020
8/10
If, like me, you've occasionally bemoaned the lack of pensions for younger workers (lets be honest I mean me), then this book is a sad accounting of their murder for profit by the corporations who swore to guard them for employees who gave decades of their lives to create a profit for the companies. But don't take my word for it, Schultz sits on a mountain of evidence, and gives it to her audience in a graspable fashion.
The core of the book is this; several trillion dollars of assets in pension funds were simply raided to boost stock prices and executive bonuses while companies claimed costs were just rising to high to continue once generous benefit packages. If this sounds extreme, consider that Executives (C suite) earn 1/3 of all pay in the US, and US companies can take out life insurance claims on its employees. That's enough to make anyone consider socialism, and I'm only partially joking.
This raiding of pensions became possible in 1987 due the accounting standard FAS 87, which required companies to include pensions in earning statements as liabilities, even though they were fully funded. In order then to improve statements, companies simply cut pensions to pretend they had made a profit. A study by Patricia McConnell of Bear Sterns found in 1999 that 3% of the operating income of S&P 500 companies came from pension income. This is completely nuts, I almost can't wrap my mind around it, and all of it is possible because pensions and 401k's are apparently not a contract, and can be changed at will by the issuing company. That sounds fairly evil to me.
As far as what to do about, I'm at a loss. Just don't trust companies or expect retirement help from either your company, or even social security unless you're almost there, though that's another matter.
“401k’s were merely the bastard children of defunct pensions.”
If, like me, you've occasionally bemoaned the lack of pensions for younger workers (lets be honest I mean me), then this book is a sad accounting of their murder for profit by the corporations who swore to guard them for employees who gave decades of their lives to create a profit for the companies. But don't take my word for it, Schultz sits on a mountain of evidence, and gives it to her audience in a graspable fashion.
The core of the book is this; several trillion dollars of assets in pension funds were simply raided to boost stock prices and executive bonuses while companies claimed costs were just rising to high to continue once generous benefit packages. If this sounds extreme, consider that Executives (C suite) earn 1/3 of all pay in the US, and US companies can take out life insurance claims on its employees. That's enough to make anyone consider socialism, and I'm only partially joking.
This raiding of pensions became possible in 1987 due the accounting standard FAS 87, which required companies to include pensions in earning statements as liabilities, even though they were fully funded. In order then to improve statements, companies simply cut pensions to pretend they had made a profit. A study by Patricia McConnell of Bear Sterns found in 1999 that 3% of the operating income of S&P 500 companies came from pension income. This is completely nuts, I almost can't wrap my mind around it, and all of it is possible because pensions and 401k's are apparently not a contract, and can be changed at will by the issuing company. That sounds fairly evil to me.
As far as what to do about, I'm at a loss. Just don't trust companies or expect retirement help from either your company, or even social security unless you're almost there, though that's another matter.
“401k’s were merely the bastard children of defunct pensions.”
May 4, 2014
Ellen E. Schultz does a marvelous job of dissecting one of the largest scams in history. The amount of outrage the rather dry material can spark is almost as breathtaking as the scope of the scam that has successfully been carried out over the last forty years.
Here she uses the words of one of the many architects of the wealth transfer, Eric Lofgren, to illustrate not only the means but the motive:
"Both definitions are true, but they slant in different directions," he said. "The first definition is the upbeat definition: 'Dear employee: A cash-balance plan is an exciting, modern, flexible new plan designed with the advantages of both defined benefit and defined contribution. Easy to understand, each employee quickly vests in a portable lump sum account which is guaranteed to increase at the CPI [consumer price index] for inflation protection. There are many benefit options at retirement.'"
"The second definition goes like this: 'Dear employee: We've got for you a cash-balance pension plan. It's our way to disguise the cutbacks in your benefits. First we're going to change it to career average [meaning that the benefit would be based on an average of one's salary, no the highest amount, as in a traditional pension]. We'll express the benefits as a lump sum so we can highlight the use of the CPI, a sub-market interest rate. What money is left in the plan will be directed towards employees who leave after just a few years. Just to make sure, we'll reduce early-retirement subsidies.'"
Here she uses the words of one of the many architects of the wealth transfer, Eric Lofgren, to illustrate not only the means but the motive:
"Both definitions are true, but they slant in different directions," he said. "The first definition is the upbeat definition: 'Dear employee: A cash-balance plan is an exciting, modern, flexible new plan designed with the advantages of both defined benefit and defined contribution. Easy to understand, each employee quickly vests in a portable lump sum account which is guaranteed to increase at the CPI [consumer price index] for inflation protection. There are many benefit options at retirement.'"
"The second definition goes like this: 'Dear employee: We've got for you a cash-balance pension plan. It's our way to disguise the cutbacks in your benefits. First we're going to change it to career average [meaning that the benefit would be based on an average of one's salary, no the highest amount, as in a traditional pension]. We'll express the benefits as a lump sum so we can highlight the use of the CPI, a sub-market interest rate. What money is left in the plan will be directed towards employees who leave after just a few years. Just to make sure, we'll reduce early-retirement subsidies.'"
April 7, 2013
Ms. Schultz delivers on her title. I had to skip through the 2nd half of the book because someone has dibs on the book at the library so I can't renew it, but her point is well made without reading every page. If you are counting on a pension, read this book. Some of the stories are really heartbreaking. With knowledge of the tricks that can be played you have a chance to avoid some of them.
Ms. Schultz is described as "formerly with the Wall Street Journal" on the book jacket. I get a lot of excellent information from that newspaper and have wondered for years if the folks who write the editorials actually ever read their paper. Apparently I am not the only person who has noticed the disconnect. From page 201 of Retirement Heist: "Meanwhile, Wall Street Journal reporters , who some say were put on earth so that they and the Wall Street Journal editorial writers would cancel each other out..." From there she goes on to describe more ways companies are cheating their their retirees and the U.S. Treasury and how the WSJ editorial board supports these thefts.
I have been self employed most of my working life so don't have a pension, but I still found the book interesting. If you have one or are counting on retiring with one, you will probably find you can't put this book down.
Ms. Schultz is described as "formerly with the Wall Street Journal" on the book jacket. I get a lot of excellent information from that newspaper and have wondered for years if the folks who write the editorials actually ever read their paper. Apparently I am not the only person who has noticed the disconnect. From page 201 of Retirement Heist: "Meanwhile, Wall Street Journal reporters , who some say were put on earth so that they and the Wall Street Journal editorial writers would cancel each other out..." From there she goes on to describe more ways companies are cheating their their retirees and the U.S. Treasury and how the WSJ editorial board supports these thefts.
I have been self employed most of my working life so don't have a pension, but I still found the book interesting. If you have one or are counting on retiring with one, you will probably find you can't put this book down.
August 27, 2013
Its worth reading. However, I highly doubt its entirely fair. In fact, I'm almost certain its not. People everywhere have mismanaged pensions, and its not always cause they're evil.
It tells one part of the story and it tells it very well- people who were sick and ill and to no fault of their own had their pension robbed. Companies that basically took the "cushion" from the pension, then trashed it when it times got rough. Yet, it should not convince the critical thinker. There was no concrete evidence to show for some of the claims. It didn't barely addressed what would have happened with better management. It also fails to show concretely that the problem is indeed systemic.
What scares me more is the solutions that people talk about. Instead of trying to call for greater awareness, people say things like "Tax businesses; tax them hard." Yet, they seem to have no idea what the economic consequences would be for what they propose.
It does make a good read, especially if you've not heard enough from this side, and especially if you are worried about the prospects of your pension- which you should be. However, you should be skeptical.
It tells one part of the story and it tells it very well- people who were sick and ill and to no fault of their own had their pension robbed. Companies that basically took the "cushion" from the pension, then trashed it when it times got rough. Yet, it should not convince the critical thinker. There was no concrete evidence to show for some of the claims. It didn't barely addressed what would have happened with better management. It also fails to show concretely that the problem is indeed systemic.
What scares me more is the solutions that people talk about. Instead of trying to call for greater awareness, people say things like "Tax businesses; tax them hard." Yet, they seem to have no idea what the economic consequences would be for what they propose.
It does make a good read, especially if you've not heard enough from this side, and especially if you are worried about the prospects of your pension- which you should be. However, you should be skeptical.
June 30, 2012
Exposé of a huge, atrocious, culture of greed's debacle. Profound bad-faith fiduciary actions by corporate leadership in the last 15 years have wrecked the financial security of America's middle class. That sounds like an exaggeration. It isn't.
NEVER due to need, as claimed (mantra-like) by CEOs in the news, healthy pensions were raided because they could be: legal loopholes were exploited, legally questionable actions were implemented in an intentional way to prevent employee backlash.
In every case, employees unequipped to fight the raiders that should have been defenders of their investments.
The introduction and first chapter of this book explain more about this appalling down-shifting of America's middle class economy than the average citizen knows. It's hard to read, because there is no remedy I'm aware of to counteract the trend.
A painful read based on an unending train of real-world instances. Solid writing.
NEVER due to need, as claimed (mantra-like) by CEOs in the news, healthy pensions were raided because they could be: legal loopholes were exploited, legally questionable actions were implemented in an intentional way to prevent employee backlash.
In every case, employees unequipped to fight the raiders that should have been defenders of their investments.
The introduction and first chapter of this book explain more about this appalling down-shifting of America's middle class economy than the average citizen knows. It's hard to read, because there is no remedy I'm aware of to counteract the trend.
A painful read based on an unending train of real-world instances. Solid writing.
October 31, 2011
A depressingly complete expose of how just about every company is screwing their employees (and retirees) out of promised pension benefits. Most times it's more a case of corporate greed or horrible decision making rather than an actual need to reduce benefits.
I think the low point for me was reading some of the quotes companies said 10 years ago when they began slashing pensions and recognizing them from my own workplace in the past year (where we also are, oddly enough, slashing pensions).
I am disappointed there was little guidance for resistance. The author points out that everything being done is legal. I just kept hoping there would be something more than, "You're screwed." that came out of this book.
I think the low point for me was reading some of the quotes companies said 10 years ago when they began slashing pensions and recognizing them from my own workplace in the past year (where we also are, oddly enough, slashing pensions).
I am disappointed there was little guidance for resistance. The author points out that everything being done is legal. I just kept hoping there would be something more than, "You're screwed." that came out of this book.
March 11, 2012
As Warren Buffet has said, “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning." This book will lead you to righteous indignation about the actions of the 1%, the 21st century's "robber barons," who are pillaging the retirement and health benefits of the elderly, the disabled and the widowed. Not only are they cutting and eliminating benefit systems that are financially sound, but they are diverting those resources into additional executive compensation -- as if there wasn't already the greatest transfer of wealth going on already!!!
Written by an investigative reporter for The Wall Street Journal, this is based on court transcripts and other documentation. This book will make you ready to start -- or join -- a revolution.
Written by an investigative reporter for The Wall Street Journal, this is based on court transcripts and other documentation. This book will make you ready to start -- or join -- a revolution.
December 4, 2011
This book has more examples per page of how the 1% have screwed the 99% than any book you can find. Ways big corporstions took pension money, lowered pension benefits while selling it as an improvement, lowered retiree medical benefits when the only reason was to increase bonuses and pensions for the execs. It is very depressing and makes you want to occupy something.
The descriptions of what happened are sometimes hard to follow because they generally hinge on technical matters which are briefly covered because this is not a technical book. So it is a little hard to read.
The descriptions of what happened are sometimes hard to follow because they generally hinge on technical matters which are briefly covered because this is not a technical book. So it is a little hard to read.
December 27, 2016
A thorough explanation of the way corporate greed has destroyed retirement funds (pension, benefits) over the past 15 or so years. The research is excellent and should be read by anyone who is counting on their company to take care of them in the future.
The two emotions one gets when reading this book are anger at how this situation has been so brazenly allowed and depression at the lives which have been destroyed (and are still to be destroyed)
Certainly not an enjoyable read, but an important one.
The two emotions one gets when reading this book are anger at how this situation has been so brazenly allowed and depression at the lives which have been destroyed (and are still to be destroyed)
Certainly not an enjoyable read, but an important one.
November 21, 2011
Quick read and illustrates one reason for the huge wealth disparity in the U.S. Good quote: "If employers continue to control the retirement system and manage it for their own benefit, then within our lifetimes, 'retirement' will inevitably revert to what it was in the 1930s and before. Society - and taxpayers - will be paying for services to support the millions of elderly, formerly middle-class Americans."
December 15, 2011
Scariest book I think I've ever read. Should be required reading for EVERY politician, but especially Republicans. Anyone who believes the fearmongering call of the right that we need to beware of "income redistribution" should read this, where detailed proof is provided that we HAVE been engaging in serious redistribution of wealth in the U.S. Sadly, the redistribution has been FROM the poor TO the already rich.
December 28, 2011
Anyone convinced it's the pensions that ate bankrupting great companies, read this book. A gripping story profiling the top of major companies putting profit for the top before security for the rest. Pirates.
December 1, 2011
Scary and upsetting --- and recommended reading!
February 16, 2012
One of 5 finalists for the Helen Bernstein Book Award for Excellence in Journalism
January 22, 2018
How many employers have plundered their pension systems.There are many methods, some legal, some not, but all unethical.
March 18, 2020
You want to know how evil these corporations can be? read this book. You want to know how these companies stole lots of money from their hard woking employees? read this book. You want to know how low these conglomerate firms can stoop so low in the name of the profit? read this book. I wish i was fully versed in finance because there are few times i have to stop and google the terms to fully understand the concept before i continue reading it. Lots of retiree dies before got what are rightfully theirs, some dies during the battle, some dies before court decided to fight for them. I think there are few moments i almost cried. I imagined if this thing happened to my grandparents, poured blood, sweat and tears for the company -- yet at the end of the day the sacrifice was forgotten just like that. Overall, i would recommend this book if you love non fiction books especially on economics and finance and would rather deals with facts and stats than imaginary characters.
May 7, 2018
Well researched and well written, Ellen Schultz paints a bleak picture for the future of retirement in America and how it is today.
I think this book is best summed up by the quote on the back by Jon Stewart from The Daily Show: "I've thought a lot about this financial crisis and I did not think there was another piece of information I could learn that could still make me angry..."
Every time I started reading the book I'd have to stop after a page or two because of how angry I got. Never in my life have I read a book that got me so mad. I must have thrown this book against a wall maybe 12 times.
Other than that unfortunate side effect, I think everyone should read this book. The more people that are angry, the more things just might change.
I think this book is best summed up by the quote on the back by Jon Stewart from The Daily Show: "I've thought a lot about this financial crisis and I did not think there was another piece of information I could learn that could still make me angry..."
Every time I started reading the book I'd have to stop after a page or two because of how angry I got. Never in my life have I read a book that got me so mad. I must have thrown this book against a wall maybe 12 times.
Other than that unfortunate side effect, I think everyone should read this book. The more people that are angry, the more things just might change.
September 12, 2022
I listened to the audio book nearly 11-12 years after it was published.
This book is eye opening though not shocking and the premise of the book is that companies have been raiding pension plans and sometimes even 401(k) plans to fund executive compensation and even guaranteed returns for executives retirement investments during the times of market downturns like the 2008 financial collapse.
We also have lawmakers that have done nothing to prevent this.
This book is full of examples of retirees trying to fight only to be stonewalled by company executives, lawyers, lobbyists and even politicians at times.
The book is in the long side.
I do recommend this book especially for the Millennial and GenZ generations so that they know what to look out for during their careers.
This book is eye opening though not shocking and the premise of the book is that companies have been raiding pension plans and sometimes even 401(k) plans to fund executive compensation and even guaranteed returns for executives retirement investments during the times of market downturns like the 2008 financial collapse.
We also have lawmakers that have done nothing to prevent this.
This book is full of examples of retirees trying to fight only to be stonewalled by company executives, lawyers, lobbyists and even politicians at times.
The book is in the long side.
I do recommend this book especially for the Millennial and GenZ generations so that they know what to look out for during their careers.
November 16, 2021
The topic is interesting and I learned a lot about how shady these companies are regarding the pensions for their employees. It had a lot of good facts.
My complaint about the book is the format/writing style. While attempting to be for the common audience and not those in the financial/accounting world, it was not presented very well. It was very dry and she just threw out a lot of numbers. When she was not going over figures, the stories she presented about individuals were easy to connect to. Her writing style seemed more suited to a short article in a journal and she tried to draw it out long enough into a book.
My complaint about the book is the format/writing style. While attempting to be for the common audience and not those in the financial/accounting world, it was not presented very well. It was very dry and she just threw out a lot of numbers. When she was not going over figures, the stories she presented about individuals were easy to connect to. Her writing style seemed more suited to a short article in a journal and she tried to draw it out long enough into a book.
January 18, 2023
Pretty amazing. jilted retirees can't sue for damages, just a return to their rightful benefits. Also, retirement benefits are the only liabilities that corporations can dislodge without bankruptcy or payment in full. What's worst is the hypocrisy of Exec Pensions; it makes it personal rather than just about profit!
This entire review has been hidden because of spoilers.
February 1, 2019
The corporate retirement shell game explained
June 5, 2024
Wow scary tale of corporate greed
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