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Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of American Workers

publication date: Jul 31, 2011
author/source: Valuentum Editorial Staff
Valuentum's subscriber base enjoys reading the latest and greatest investing books. As a result, Valuentum requests and receives business and investing books before they are officially released. Our editorial staff took a look at the following book, and here's what we thought after reading it:

Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of American Workers

By Ellen Schultz. Portfolio Hardcover, 2011. 256 p. ISBN 978-1-5918-4333-7.
Book Release Date: September 15, 2011

The demise of pension funds and other retiree benefits has been blamed in recent years on a “perfect storm” of rising costs, accelerating retirements, and the global economic crisis. However, Schultz (investigative reporter for the Wall Street Journal) provides a scathing exposé that reveals the tactics companies have used to take advantage of loopholes in the law regarding the funding and disbursement of pension funds, using this money for everything from paying creditors and providing health benefits to funding restructuring and executive compensation. Schultz shows how plush pension funds have proven to be too great of a temptation for many companies, leading to the cycle where “[pension fund] cuts generate gains, which get added to profit, which lifts earnings, which helps the stock price, which boosts the compensation of the executives, whose pay is based on performance.”

Valuentum’s Take: Schultz has an engaging style that makes this a fast read. A plethora of examples from well-known organizations, from the NFL to airlines, automakers, and banks, show how widespread the problem is. While this is a fascinating exploration of what happens when companies, that in the past had ample resources, create and exploit loopholes in order to “raid the piggybank,” it will provide little consolation to those workers who have found themselves on the other side of this equation.

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