Problem isn't teacher pensions; it's corporate theft of private pensions
Over and over, loyal, deserving employees with modest incomes have watched their planned retirement savings disappear because of corporate managers and pension industry consultants. Journalist Ellen Schultz has been writing about such shameful behavior for a long time, mostly in The Wall Street Journal. Now she has pulled together the copious, irrefutable evidence between the covers of a book. It is shocking, and demoralizing….
The book is crammed with heartbreaking anecdotes of retirees suffering (and in some cases probably dying) because of pension-related corporate greed. But the perpetrators have not been charged with any crimes.
…she writes, “What [GE CEO] Immelt didn’t mention was that, far from being a burden, GE’s pension and retiree plans had contributed billions of dollars to the company’s bottom line over the past decade and a half, and were responsible for a chunk of the earnings that the executives had taken credit for. Nor were these retirement programs — even with GE’s 230,000 retirees — bleeding the company of cash. In fact, GE hadn’t contributed a cent to the workers' pension plans since 1987 but still had enough money to cover all the current and future retirees.”
Then Schultz delivers the clincher: GE was indeed burdened by a pension plan — the plan for top executives. The obligations of that plan, for a minuscule number of individuals compared with the 230,000 lower-level retirees, totaled $4.4 billion and had drained about $573 million from the corporate treasury over the past three years.
Posted by James on Wednesday, October 19, 2011