|Some rob you with a six-gun, some with a fountain pen.
Pension Pulse tells us that Schulz explains how companies used these tactics:
- 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 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.
- Exclude millions of low-paid workers from 401(k)'s to make the plans more valuable to the top-paid.
Schultz cites this example of one well-known company whose pension fund has dropped significantly since the early 1990s. General Electric announced it was closing its pension plan to be more competitive. She says the company's financial filings show that GE has not put a cent into its pension plans since the mid-1980s. Over the years, GE, like most large companies, used assets in the plans to pay for other things.Writes Pension Pulse:
And now that there is no more money left to plunder, corporations have decided to dump defined-benefit plans and move into less costly and more risky defined-contribution plans, shifting the retirement burden onto workers and leaving them at the mercy of this volatile wolf market.Somehow, none of this is surprising.