In a new book, Retirement Heist, prize-winning journalist Ellen Schultz has provided the ultimate backstage pass to the world of pensions, with plenty of drama and shocking details. Schultz, a former Wall Street Journal reporter, has woven together a compelling story that reveals how arcane accounting rules, legal maneuvering, and unfair claims procedures have led to the loss of retirement security by millions of American workers.
Most compelling for me were the individual stories of benefit cutbacks and denials. There is an inevitable “David versus Goliath” feeling you share with the workers who face these situations. Their cases can take years to resolve and many are not successful, but Schultz has thoughtfully included a number of cases that ended well for participants.
As is evident from the subtitle of the book — How Companies Plunder and Profit from the Nest Eggs of American Workers — Schultz doesn’t mince words when discussing the problem:
With perfectly legal loopholes that enabled companies to tap pension plans like piggy banks, and accounting rules that rewarded employers for cutting benefits, retiree benefits soon morphed into profit centers, and populations of retirees essentially became portfolios of assets and debts, which passed from company to company in swirls of mergers, spin-offs, and acquisitions. And with each of these restructuring deals, the subsequent owner aimed to squeeze a profit from the portfolio, always at the expense of the retirees.
The publication of Retirement Heist couldn’t be timelier. As Joellen wrote last week, newly released poverty figures show that the poverty rate in this country has reached its highest level in nearly 20 years. At the same time, the two of the programs most responsible for keeping people out of poverty – Social Security and Medicare – may be targeted for cuts by the Super Committee. Unless action is taken, the nation’s $6.6 trillion Retirement Income Deficit will increase astronomically. An excellent place for Congress to start to addressing this crisis would be to close the many gaps in the law illustrated by this book.
Learn more on the book’s website: www.RetirementHeist.com.