Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of American Workers

Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of American Workers

4.5 9
by Ellen E. Schultz

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"'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,


"'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.

Editorial Reviews

Publishers Weekly
The retirement crisis is no accident, claims Wall Street Journal investigative reporter Schultz; large companies have played a significant role in its creation to protect the wealth of its top executives. When GE, IBM, Verizon, and others slashed pensions and medical benefits for millions of American retirees, they pointed fingers everywhere but at themselves—but who was really at fault? Pension funds were not bleeding the companies of cash. GE hadn't contributed a cent to the workers' pension plans since 1987, but still had enough money to cover all current and future retirees. Executive pensions at GE, with a billion obligation, are a drag on earnings. These are largely hidden, however, lumped in with the figures for regular pensions. Schultz's methodical cataloguing of these abuses paints a highly unflattering picture of companies that cut benefits to boost earnings, lay off older workers who are entering the years in which their pensions will spike, inflate retiree health benefits to boost profits, lobby for laws that keep the system inequitable, hoard death benefits, and fire whistle-blowers. Heartbreaking stories of destitute seniors are juxtaposed with the obscene surpluses in pension funds for executives ( billion at GE; billion at Verizon; billion at AT&T)—and unless the global retirement industry is reined in, Schultz points out, it will continue to capture retirement wealth earned by many to enrich a relative few, and within our lifetimes, "retirement" will inevitably revert to what it was in the 1930s and before. A fascinating, troubling exposé and a sobering call to arms. (Sept.)
From the Publisher
"A blistering examination of corporate greed and avarice. Essential reading for anyone who works for a living."

"A fascinating, troubling expose and a sobering call to arms"
Publishers Weekly

"Retirement Heist is a concise and alarming look at how-in the span of a generation-the 1 percent has looted the futures of the 99 percent."
Kelly Johnson, The Washington Post

"Ms. Schultz herds all her journalistic cattle into a single corral, laying out by what any measure is a damning indictment of the broken pension promises too many American corporations have made to their workers . . . This book should be required reading."
Bryan Burrough, The New York Times

"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…. Thank you."
Jon Stewart, The Daily Show

"Journalist Ellen Schultz has been writing about such shameful behavior for a long time, mostly in The Wall Street Journal. Now she has pulled together the copious, irrefutable evidence between the covers of a book. It is shocking, and demoralizing. … In most cases documented by Schultz, the perpetrators have escaped widespread blame - except in her investigative pieces and now in this book."
Steve Weinberg, USA Today

''Meticulously researched and as gripping as a crime novel, this is essential reading for anyone who has, had, or hopes to have a job.''
Nell Minow, cofounder of The Corporate Library and author of Watching the Watchers: Corporate Governance for the 21st Century

''Americans have long been burdened by the overwhelming challenge of saving for retirement, as tax deductions for retirement savings favor the highest income earners and pension coverage erodes. But as an economist investigating the retirement crises I was shocked at Ellen Schultz's exposure of outright lies, manipulations, and pure greed of the employers trusted with our retirement funds.''
Teresa Ghilarducci, director of the Schwartz Center for Economic Policy Analysis and author of When I'm Sixty-Four: The Plot against Pensions and the Plan to Save Them

''Retirement Heist uncovers one of the most significant threats to the American worker of our time. Ellen Schultz's reporting is expansive, smart, and will have you shouting for someone to be held accountable. Anybody who works and is worried about their future should read this book.''
Lewis Maltby, president of the National Workrights Institute and author of Can They Do That? Retaking Our Fundamental Rights in the Workplace
"Ellen Schultz has been bravely uncovering crimes of the corporate state since well before it was en vogue. Retirement Heist is like an acclaimed artist's most profound masterpiece-or, more accurately, a horror auteur's most frightening film of all."
David Sirota, syndicated columnist, radio host, and bestselling author of The Uprising and Back to Our Future

''The retirement security of millions of Americans hasn't been lost to the recession or the demographics of an aging workforce, it's been stolen-by corporate executives and their consultants, lobbyists, accountants, and lawyers. Retirement Heist is an important book for workers and policymakers that documents how corporate profits and executives' salaries have been inflated at the expense of the middle class.''
Jay Feinman, distinguished professor, Rutgers University School of Law, Camden and author of Delay, Deny, Defend: Why Insurance Companies Don't Pay Claims and What You Can Do about It

Kirkus Reviews

A blistering examination of corporate greed and avarice.

Readers are no stranger to the grumblings of their corporate overlords: Pensions are untenable; health-care costs too high; retiree benefits hurt competitiveness. But according to Pulitzer Prize–winning Wall Street Journal reporter Schultz, employee pensions actually make money for corporations, and the funds diverted from them help feather the beds of multi-millionaire executives. She exposes all this and more in a rapid-fire narrative. Individual stories of retired men and women (some with more than 40 years of service) robbed of their nest eggs put a human face on the proceedings. The extent of corporate obfuscation is nearly incalculable, but the author does a stellar job breaking it all down, succeeding where regulators, lawyers and members of Congress have failed. Schultz's debut is a significant call to action, and ignoring her findings would be inadvisable. Her story of a minivan full of diabetic and cancer patients forced to travel more than 100 miles just to have their day in court should alone be enough to spur new reforms. Schultz unleashes an undeniably powerful and penetrating look into corporate money-making machinations and the havoc inflicted on rank-and-file employees.

Essential reading for anyone who works for a living.

Kelly Johnson
Retirement Heist is a concise and alarming look at how—in the span of a generation—the 1 percent has looted the futures of the 99 percent. Schultz wields expertise from years of investigative reporting on the retirement crisis for the Wall Street Journal.
—The Washington Post

Product Details

Penguin Publishing Group
Publication date:
Product dimensions:
6.28(w) x 9.26(h) x 0.90(d)
Age Range:
18 Years

Meet the Author

Ellen E. Schultz is an investigative reporter for The Wall Street Journal who has covered the so-called retirement crisis for more than a decade. Her reporting has led to Congressional hearings, proposed legislation, and investigations by the Treasury and the GAO.

Schultz has won dozens of journalism awards for economics, financial, and investigative reporting, including three Polk Awards, two Loeb awards, and a National Press Club award. In 2003, Schultz was part of a team of Wall Street Journal reports awarded the Pulitzer Prize, for articles on corporate scandals. She lives in New York City.

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Retirement Heist 4.6 out of 5 based on 0 ratings. 9 reviews.
Anonymous More than 1 year ago
That people raise children that become cogs and leaders in the schemes exposed in this book. It is sad how little it costs to buy a governent officials vote. Organized crime runs the country.
RedMcBlue More than 1 year ago
Next time you read a news report that ¿the company is being crippled by legacy pension & healthcare costs¿ then you will understand the fraud, theft, lies and management greed behind that claim. Millions of blue & white collar workers are having their justly-earned futures stollen to make fortunes for a few elite executives, but almost nothing is being done about it. My only complaint is that there was not more. Quite an education. Note: Should have purchased in the traditional format, so that I could pass the book on to others, or give as a gift, with no weird digital restrictions.
JD48 More than 1 year ago
This book was extremely revealing for me. It uncovered some of the major reasons for our economic failures in the area of retirement funding. This is major for those who wish to understand the truth behind the current economic conditions.
discobill More than 1 year ago
Required reading for anyone wanting to know how corporations go about cheating former employees out of promised pension and health care benefits through a system of accounting gimmicks, legal maneuvering and out right lies. And how they go about funding their massive deferred compensation packages. This is not an easy read, but well worth it. The author takes you through some areas (notably accounting practices) that some may not understand or want to take the time to understand. But if you have ever worked in corporate America many subjects will hit home and you might understand deeper motives behind what is happening now (most notably the efforts to destroy collective bargaining). Check this book out. I thought I couldn't get any angrier at the current state of affairs. I was wrong.
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