New book: RETIREMENT HEIST by Ellen Schultz
An investigative reporter reveals what the retirement industry does with pensions, benefits
Dear Journalist:
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.
In RETIREMENT HEIST: How Companies Plunder and Profit from the Nest Eggs of American Workers (Portfolio; September 15, 2011; Hardcover; $26.95), Ellen E. Schultz, an award-winning investigative reporter, 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, confidential memos, and interviews with affected retirees, Schultz uncovers that for decades employers have exaggerated their retiree burdens while lobbying for government handouts, secretly cutting pensions, tricking employees, and misleading shareholders. And the employers perpetrating this upon their retirees are household names: AT&T, Bank of America, IBM, Cigna, General Motors, GE, Comcast, UPS, and the NFL, just to name a few.
In RETIREMENT HEIST Schultz reveals how employers:
- 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.
- Exclude millions of low-paid workers from 401(k)’s to make the plans more valuable to the top-paid.
Though the focus is on large companies (which drive the legislative agenda) the same games are being played at smaller companies, non-profits, and public pension plans. 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 exposé of one of the most critical and least understood financial crises of our time. I urge you to schedule prominent coverage for September, and I will call soon to follow up with you.
Best,
Angela Hayes Jacquelynn Burke
VP, Director of Publicity Publicist
Goldberg McDuffie Communications Portfolio | Penguin
212-705-4221 212-366-2412
ahayes@goldbergmcduffie.com Jacquelynn.burke@us.penguingroup.com
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, proposed legislation, and investigations by the Treasury and the GAO. Schultz, a former staff reporter for The Wall Street Journal, 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. She lives in New York City.
Jacquelynn Burke
Penguin | Portfolio
212-366-2412, jacquelynn.burke@us.penguingroup.com
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