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Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of American Workers [Kindle Edition]

Ellen E. Schultz
4.7 out of 5 stars  See all reviews (73 customer reviews)

Kindle Price: $10.99
Sold by: Penguin Group (USA) LLC

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Book Description

Winner of the 2012 Helen Bernstein Book Award for Excellence in Journalism

 

Hundreds of companies have slashed pensions and health coverage for millions of retirees, claiming that a “perfect storm” of stock market losses, aging workers, and spiraling costs have forced them to take drastic measures.

 

But this so-called retirement crisis is no accident. Ellen E. Schultz, an award-winning investigative reporter formerly of The Wall Street Journal, reveals how large employers and the retirement industry have all played a huge and hidden role in the death spiral of American pensions and benefits.



A little over a decade ago, pension plans were fat. But companies used slick accounting and dubious loopholes to turn their pension plans into piggy banks, tax shelters, and profit centers. As pensions weakened, companies slashed benefits for workers while doling out gargantuan pensions to their top executives.

 

Drawing on original analysis of company data, government filings, and confidential memos, Schultz uncovers decades of widespread deception during which employers exaggerated their retiree burdens while tricking employees, misleading shareholders, and lobbying for taxpayer handouts.




Editorial Reviews

Review

''For anyone seriously interested in the retirement industry--and that's what it amounts to, an industry--this book should be required reading.'' --New York Times

''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 documents the biggest heist in history, all the more horrifying because it is legal. Accounting tricks, perverse tax incentives, and bonus-hungry executives have taken the retirement money American workers have saved over decades. 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. Retirement Heist will help ordinary workers pressure Congress to enact serious pension reform.'' --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 takes a provocative look at the unseen corporate forces that have weakened our nation's employer-provided retirement benefits. Ellen E. Schultz documents an emerging corporate culture--spurred on by benefit consultants--that places shareholder value and executive compensation above employee retirement security. Retirement Heist shows how the growing retirement insecurity of today is a direct outgrowth of the hidden manipulation of plan benefits for other corporate purposes.'' --David Certner, legislative policy director for the American Association of Retired Persons

''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

''Heartbreaking stories of destitute seniors are juxtaposed with the obscene surpluses in pension funds for executives--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.'' --Publishers Weekly

''A blistering examination of corporate greed and avarice . . . A rapid-fire narrative . . . 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.'' --Kirkus Reviews (starred review)

About the Author

ELLEN E. SCHULTZ is an investigative reporter who has covered the so-called retirement crisis for more than a decade. Her reporting has led to congressional hearings, new legislation, and investigations by the Treasury and the Government Accountability Office. A former staff reporter for the Wall Street Journal, she 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, she was part of a team of Wall Street Journal reporters awarded the Pulitzer Prize for articles on corporate scandals. She lives in New York City.

Product Details


Customer Reviews

Most Helpful Customer Reviews
130 of 141 people found the following review helpful
5.0 out of 5 stars Outstanding! September 18, 2011
Format:Hardcover
Ellen Schultz's 'Retirement Heist' is both enlightening and aggravating. 'Retirement Heist' is the outgrowth of years of digging through SEC and IRS filings, as well as numerous interviews. The book tells how companies have turned pension plans into piggy banks, tax shelters, and profit centers through exploiting loopholes, ambiguous regulations, and new accounting rules. In doing so they have also exaggerated retiree burdens to lobby for government handouts, secretly cut employee pensions while boosting executive pensions, and mislead employees and shareholders. New flexibility in accounting rules have also turned retiree plans into earnings-management tools, helping to boost stock prices and, thereby, executive pay.

The story begins in 1999 after the stock-market run-up in the 1980s which left corporations with over $250 billion in excess pension fund assets, aided also by years of downsizing and 1990 and 1974 laws limiting raids on fund surpluses and requiring adequate funding. Many of the corporations hadn't contributed to their pensions in over ten years, yet had enough assets to cover all current/future retirees to age 100. Their lobbying then allowed new uses for those monies.

Bell Atlantic then used $3 billion to finance early-retirement benefits for 25,000 managers being let go, and Verizon (its eventual successor) continued the practice - the result, combined with a relatively small market decline, was the surplus fell from $24 billion in 2000 to $1.7 billion in early 2005. It then froze the pensions of its 50,000 management employees, withdrew another $5 billion, and by early 2011, when the market was higher than in 2000, the plan had a $3.4 billion deficit. Delphi, Delta, Ford, G.M.
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38 of 39 people found the following review helpful
Format:Hardcover
First, read RETIREMENT HEIST to understand how executives in corporations and their hired enablers and strategists, benefits consulting firms, use accounting tricks, legal loopholes, deception, and outright lying to rob people -- maybe you -- of their pensions.

Second, read it to understand how these same executives have and continue to transfer wealth, if you can call employee nest eggs that, from their workers to themselves to fund their ludicrously inflated pensions.

Third, read it to understand how executives are burdening their companies with huge unfunded deferred compensation packages that may prove costly to employees and investors in the future. And given recent trends, let's include all taxpayers.

Fourth, read it to understand the new meaning of financial management and how executives use financial maneuvers to deceive not just their employees and government monitors but also investment analysts and investors.

For an overview of the book, scroll up to the book description and also read Lloyd Eskildson's excellent review. And don't immediately assume Schultz is talking about obviously shady operators. She's talking about and citing the shenanigans of executives in corporations widely held by investors and leaders in their business sectors. Among those covered are AT&T, Bank of America, American Greetings, Cigna, Delta Airlines, IBM, the National Football League, and many more, perhaps your employer or stock investment among them.

Schultz writes clearly about even the most complex tactics and supplies plenty of examples to illustrate her points. After finishing, you will understand the games executives play with retirement and healthcare benefits, as well as their own compensation packages.
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43 of 45 people found the following review helpful
5.0 out of 5 stars Excellent excellent book. October 1, 2011
By reader
Format:Hardcover|Verified Purchase
Excellent, excellent book! I highly recommend this book to anyone who is part of a pension plan or collects a pension.

I could not put this book down and read it in two evenings. I then ordered three copies to give to coworkers.

This book explains in plain English how companies manipulate pension plans for their profit to the detriment of the plan participants and retired pensioners. Truly an eye opener with real life examples from Caterpillar, ATT, Verizon, US Steel, and on and on. The author even lists some of the court cases brought by pensioners for those who want to dig a little deeper.

Definitely worth a read.
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69 of 86 people found the following review helpful
3.0 out of 5 stars Just the tip of the iceberg September 25, 2011
Format:Hardcover|Verified Purchase
Retirees and long-term employees good. Big corporations and pension consultants bad. Executives greedy. That's the driver. But don't we already know that? The gist of the book -- anecdotes showing how any number of large corporations have "used" tax-qualifed defined benefit pension plan assests, the cutback and termination of retiree medical benefits and the accounting rules, legally, for the most part, to boost accounting profits, secure executive retirement benefits after-the-fact, and terminate or freeze defined benefit plans, all to the detriment of rank and file employess. Much of what the author says is completely true, but she doesn't hesitate to use half-truths (truthiness) to make her points either. There are at least a couple of apparent errors of fact and law, but not enough to do any harm, given the non-technical nature of the book. So, if you're a layman who knows little about the retirement benefits industry, this book would be a good eye-opener. Just remember that it's only one side and one small part of the story, presented from the underdog standpoint.

Schultz is a Wall Street Journal investigative reporter and acknowledges that "[m]any of the stories in this book first appeared in some form in The Wall Street Journal . . . ." Moreover, that's exactly how the book reads, like an extended newspaper article. Here are my gripes.

One. No footnotes to sources. There are a few references to page numbers in the "Notes" section at the rear of the book, but most "facts" are uncited. Also in the "Notes" chapter, the author says "To simplify matters, I have omitted specific citations of pages and dates [from SEC Form 11-K reports], but figures for a specific year come from filings made the following calendar year.
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Most Recent Customer Reviews
5.0 out of 5 stars An eye opener
Makes you aware of the corporate shenanigans to use tax laws
for corporate benefit and ultimately reduce retirement /health care
benefits
Published 3 months ago by W. Jessberger
5.0 out of 5 stars A must-read for every working American
This is one of the most informative, yet simplistic books written on the current travesty of the retirement of American middle-class workers. Read more
Published 3 months ago by AG
5.0 out of 5 stars Seniors must read this book
The reality is that our retirement savings and investments for retirement are being misused....it would be good to have a number of similar books retirement is near.
Published 4 months ago by Judith Sabo
5.0 out of 5 stars Retirement Heist: how companies plunder
Great book to read to understand why we have a retirement crisis now. Eye opening examples and anecdotes of large companies ripping off retirees of their pensions and retirement... Read more
Published 4 months ago by Brian O'Neill
5.0 out of 5 stars Everyone in America should read this book if they want ...
Everyone in America should read this book if they want to understand what happened to our national economy in 2008.
Published 4 months ago by P. WARD
5.0 out of 5 stars Great Book!
Learn how companies are taking their employees pension plans to the cleaners...legally. Educate yourself and become active in trying to get the laws changed to stop this from... Read more
Published 5 months ago by Dianna Frazier
4.0 out of 5 stars Should be required reading of all Congressmen
Read this book, then write your Congressman. If this doesn't make you really angry then nothing much will. Read more
Published 6 months ago by Robert P Morgan
3.0 out of 5 stars It's ok.
It felt like reading a really, really long term paper. Could have just stated here's all the nonsense GE has been up to for the past 30 years - GE hits EPS 40 quarters in a row? Read more
Published 6 months ago by James Hamill
3.0 out of 5 stars Too wordy
It was too long for me to read , I lost I interest very quickly . the toptic was good but all that stuff was not needed.
Published 6 months ago by Visa
5.0 out of 5 stars Great Insight - must reading
Great Insight - must reading

"15 more words required" you (Amazon) say? NO WAY JOSE! Read more
Published 7 months ago by John D Stone
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More About the Author

Ellen E. Schultz is a former 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 reporters awarded the Pulitzer Prize for articles on corporate scandals. A San Francisco native, she attended U.C. Berkeley, and was an adjunct professor of journalism at New York University for five years.

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