February 28, 2024

Off the Shelf: When Retirees Are Shortchanged for Corporate Profits

Now, inevitably, comes the book. In “Retirement Heist: How Companies Plunder and Profit From the Nest Eggs of American Workers” (Portfolio/Penguin, $26.95), Ms. Schultz herds all her journalistic cattle into a single corral, laying out by what any measure is a damning indictment of the broken pension promises too many American corporations have made to their workers. For anyone seriously interested in the retirement industry — and that’s what it amounts to, an industry — this book should be required reading.

For just about everyone else, alas, “Retirement Heist” is hard to recommend. Ms. Schultz is a top-tier newspaper reporter, but as an author, as a shaper of narrative, well, she’s a top-tier newspaper reporter. The book reads like a very, very long Journal article or, worse, a hefty think-tank white paper. This may have been unavoidable, but its sheer density of pension and related jargon will defeat many readers who aren’t accountants or actuaries. I had to stop a number of times in the first 50 pages just to fully understand what Ms. Schultz was trying to tell me.

Which is a shame, because she has quite a story to tell. It’s hard to distill the book’s far-flung elements into a single narrative, but it appears to come down to this: After the huge run-up in stocks during the 1980s, American corporations were sitting on billions of dollars in pension funds that weren’t going to be paid to retirees anytime soon. They began pushing to use the money themselves, an effort that resulted in a series of new accounting guidelines and federal regulations that, in time, allowed them to put pension monies to all sorts of uses never before envisioned. Financing corporate restructurings. Paying for retiree health benefits. Paying for golden parachutes. Some companies simply eliminated the pension plan altogether and took the money themselves. At the same time, Ms. Schultz shows, companies like I.B.M. steadily cut back on pension and health benefits while assuring employees that it was making the plan more “modern.”

The mind-boggling complexity of many pension statements prevented most employees from understanding what was going on; a notable exception came at I.B.M., where a handful of older workers figured it out and began protests. Corporations, of course, rarely if ever acknowledged that they were shortchanging their retirees. Everything they were doing, some pointed out, was not only completely legal but also a boon to shareholders.

In Ms. Schultz’s telling, there was almost nothing that some corporations wouldn’t do to pare their pension obligations, from canceling death benefits to instituting “clawbacks” — that is, informing retirees that they had somehow been overpaid and demanding a lump-sum repayment that very few were able to afford. No promise, it would appear, was too small to be broken. A reader should feel something like outrage at this kind of behavior, but I felt little, in large part because the book, especially in its first half, focuses more attention on tricks played by employers than the plight of victimized retirees. Pension abuse affects millions of Americans, yet not enough of them make it into the pages of “Retirement Heist.”

Where they do, the book jumps to life. Some of these stories are heart-rending. There’s the corporate pilot who was presented with a clawback bill even as he struggled with esophageal cancer, a debt his widow continued scrambling to pay even after his death. And the retiree who lost his death benefit on his deathbed. And the 80-year-olds forced to take jobs at Wal-Mart to pay for health care their companies canceled. And the N.F.L. players who fought for disability benefits after they retired. This book could have used many more of these stories.

Given the complexity of pension and accounting regulations, “Retirement Heist” cries out for history and context, a sense of where the pension world came from, the forces that shaped its rise and how companies historically dealt with pensioners. Yet little of that is here; in the text, it’s as if pensions sprang up fully formed in the mid-1980s to be abused by companies in the 1990s.

A small industry of pension consultants has emerged to show companies how to pare and profit from their retirees, yet the book, despite repeatedly citing the names of these firms, gives us little information about their origins, operations and size. Even if they (smartly) wouldn’t discuss their business, aren’t there former employees willing to talk? How about a Michael Moore-style visit to one of their headquarters?

I don’t mean to be too hard. Ms. Schultz has done heroic work compiling her facts, and is to be applauded. But the best journalism, unfortunately, does not always ensure the best book, an unpleasant fact that always leaves me feeling a little wistful.

Article source: http://feeds.nytimes.com/click.phdo?i=d82606023d28a07c6d57af33bc21db78

Speak Your Mind