Salon - The theft of the American pension

[Yo_Mama_Been_Loggin]

In the last decade, the country's biggest companies have raided worker benefits for profit. An expert explains how
By Thomas Rogers

America is in the midst of a retirement crisis. Over the last decade, we've witnessed the wholesale gutting of pension and retiree healthcare in this country. Hundreds of companies have slashed and burned their way through their employees' benefits, leaving former workers either on Social Security or destitute -- and taxpayers with a huge burden that, as the baby boomer generation edges towards retirement, is likely to grow. It's a problem that is already affecting over a million people -- and the most shocking part is, none of this needed to happen.

As Ellen E. Shultz, an investigative reporter for the Wall Street Journal, reveals in her new book, "Retirement Heist," it wasn't the dire economy that led these companies to plunder their own employees' earnings, it was greed. Over the last decade, some of the biggest companies -- including Bank of America, IBM, General Motors, GE and even the NFL -- found loopholes, abused ambiguous regulations and used litigation to turn their employees' hard-earned retirement funds into profits, and in some cases, executive compensation. Schultz's book offers a relentlessly infuriating look at the mechanisms they used to get away with it.

We spoke to Schultz over the phone about the companies' deliberate deceptions -- and what they mean for the future of the country.

.....

A striking example was Lucent, which inherited about 100,000 retirees when it was spun off from AT&T. From the beginning, Lucent kept saying, "We are crippled by these retirees," but the truth is, they also received more than enough actual money from AT&T to pay every dime of benefits for all the current and future retirees. Bit by bit, they cannibalized these benefits. They eliminated a death benefit, which is a very simple thing that says, if you work for us for 25 or 30 years, and you die, your widow will get $50,000 dollars or whatever per year. Lucent said they couldn't afford that. So they took it away and saved $400 million that had been set aside physically in the pension plan for these folks. At the same time, they awarded more than $400 million in bonuses to executives.

http://www.salon.com/news/economics/index.html?story=/mwt/feature/2011/09/17/retirement_heist_interview

[JHB]

1. They never call it "redistribution of wealth"...

...when it's redistributed upward.

[n2doc]

2. Ain't that the truth n/t

[quaker bill]

15. It is only redistribution

when we take it back.

[Dan]

3. Well,

you don't know what you got, till it's gone.

[Kaleko]

4. In the next 2 months, this timebomb will explode into public awareness.

The US is hurtling toward committing its well-known form of social genocide at home.

Read this to understand the background of what's happening worldwide:

Andrew Gavin Marshall: The Great Global Debt Depression: It’s All Greek To Me

http://andrewgavinmarshall.com/2011/07/15/167/

"We are entering a global age of austerity, where our political leaders commit social genocide for the benefit of the global banks, and at the behest of the institutions that represent them. The IMF and other supranational institutions increase their own powers and authority in order to punish and impoverish large populations. What has been done to the ‘Third World’ – the ‘Global South’ – over the past several decades is now being done to us, in the industrialized North."


**Special thanks to dixiegrrrl who first posted this amazingly lucid article in the Economy forum

[malaise]

5. And not one is is prison

but if one of those workers had committed fraud for $5,000, he or she would still be inprison.

Time for these criminals to be sent to prison.

[lonestarnot]

6. Fuckers! They shouldn't be allowed bail money!

[WinkyDink]

7. The PROBLEM is that nobody HANGED for these gigantic THEFTS.

[SharonAnn]

8. Well, I knew in 1985 that our company (Fortune 100) "improved" the pension plan,

that they were siphoning the money from it. My husband didn't believe it of the company (he was a second-generation employee) but I showed him how they were taking out the "over-funding" and diverting it to company cash and then paying themselves bonuses. It was a real eye-opener for him.

When the Wall Street money managers or the company executives want to do something that involves a lot of our money, you can bet that they've found a way to steal it.

[Yo_Mama_Been_Loggin]

11. I worked for a company with an over-funded pension fund.

Remember GTE? Just before it merged with Bell Atlantic to become Verizon it had a pension fund of a few billion dollars.

Several years after Verizon was formed the company stopped providing additional pension money for lower level managers and required they contribute to their 401Ks instead.

Part of the recent strike by Verizon employees is the company's insistance that the CWA and IBEW members take reduced pensions.

I now work for one of Verizon's spin-off companies, Frontier, and hope to retire before they declare Chapter 11 bankruptcy like all other Verizon spinoffs have done.

[Sarah Ibarruri]

9. So, what was the reason again that I was supposed to admire corporations for??? nt

[nadinbrzezinski]

10. When this goes off

Won't be pretty... oh and relatively soon

[JHB]

16. One can hope, but don't be too sure...

This has been going on for more than the decade mentioned in the article. More like 20 or 30. Plenty of time for it to have gone off already.

[sarcasmo]

12. Kick and in ten years it will be the theft of the 401K.

[chill_wind]

13. K & R.

[Kaleko]

14. Bump