Ellen Schultz - Retirement Heist

121 “Without these suicides, NCC would be running at 33%”:Exhibits provided by Mike Myers, of McClanahan, Myers, and Espey, a Houston law firm that has handled numerous COLI cases.

121 To keep track of when employees and retirees die:Ellen E. Schultz and Theo Francis, “Companies Tap Pension Plans to Fund Executive Benefits—Little-Known Move Uses Tax Break Meant for Rank and File,” The Wall Street Journal, August 4, 2008.

122 His mother died in 1998 at age sixty-two. Her family received a $21,000 benefit:Author interview with John Reynolds.

123 a brown envelope was left on the desk of Ken Kies:Ellen E. Schultz and Theo Francis, “Death Benefit: How Corporations Built Finance Tool Out of Life Insurance,” The Wall Street Journal, December 20, 2002.

124 Ways and Means chairman Bill Archer, who had criticized janitors insurance:Clark/Bardes Inc. proxy statement.

127 The mass death of heavily insured executives:Society of Actuaries meeting, Washington, D.C., 2003.

128 The twenty-year-old was working at a Stop N Go:Schultz and Francis, “Death Benefit.”

130 Banks took out billions of dollars’ worth of this life insurance:Bank “call reports” filed with the Federal Financial Institutions Examination Council.

131 Insurance regulators, who often accommodate the wishes of the industry:Disclosure information based on interviews with regulators and industry representatives.

135 The company’s effective guaranteed return on the contribution in the first year:Schultz and Francis, “Companies Tap Pension Plans”; calculation by Theo Francis.

141 Lorenzo Walker, one of the warehouse workers at Hugo Boss:Author interview.

143 One employee got a pension increase: Gromala v. Royal & Sun Alliance.

148 “The Company is not committed to maintenance of a retiree’s standard of living”:Internal company memos, Ellen E. Schultz, “Retirees Found Varity Untruthful,” The Wall Street Journal, November 6, 2000.

148 “death of all existing retirees”:Company memo.

160 He thought the job was pretty decent:Author interviews with GenCorp retirees, including Ed Peksa, Kenneth Bottolfs, Mabel Kramer, and John Van Dyke; court records in Wotus v. Gencorp, 5:00 cv 2604 (N.D. Ohio).

170 Asarco, was suing him and other retirees in federal court: Asarco v. United Steelworkers of America, 03-CV-1297-PHX-FJM, 2005 U.S. Dist. Lexis 20873 (D. Ariz. 2005); Author interview with Edward C. Yarter et al.

172 Rexam, a maker of cans for beverages: Rexam, Inc. v. United Steelworkers of America, No. 03-2998, 31 E.B.C. 2562 (D. Minn. 2003), later proceedings, 2005 WL 2318957 (D. Minn. 2005).

174 “They shopped more than we did, Judge”: Crown Cork & Seal v. United Steelworkers of America, 03-CV-1381, 32 E.B.C 1950, 2004 U.S. Dist. Lexis 760 (W. D. Pa. 2004), related to Lawhorn v. Crown, No. 1:03-CV-461 (S.D. Ohio 2003).

175 “We will file in federal court against you bastards”: ACF Industries v. Chapman, 4:03CV1765 HEA, reported decision at 2004 U.S. Dist. Lexis 27245 (E.D. Mo. 2004), related to Chapman v . ACF Indus., 3:04-0062, 430 F. Supp. 2d 570 (D. W. Va. 2006).

177 but the company denied his claim:Brief of Amici Curiae, National Black Lung Association and Appalachian Citizens’ Law Center, Inc., Lawyer Disciplinary Board v. Douglas A. Smoot, Supreme Court of Appeals of West Virginia, No. 34724.

180 protected by steel fences:Ken Ward Jr., “The Dark Lord of Coal Country,” Rolling Stone, November 30, 2010.

180 And he gets to keep a 1965 blue Chevrolet truck:Compensation details from the company proxy statement.

182 “I took every play like it was my last play”:Author interview.

183 Focusing on the word “a,” the arbitrator said: Victor A. Washington v. Bert Bell/Pete Rozelle NFL Player Retirement Plan, et al., Nos. 05-16366, 05-16533, 05-16845 (U.S. Court of Appeals, Ninth Circuit, 2007).

185 only ninety… former pro players covered by the NFL disability plan:Ellen E. Schultz, “A Hobbled Star Battles the NFL: Doctors Say Football Left Victor Washington ‘Totally Disabled.’ Two Decades Later, the League Still Disagrees,” The Wall Street Journal , December 3, 2005.

186 “Injuries may not put you in a wheelchair for the rest of your life”:Author interview with Randy Beisler.

186 Mike Webster had been a center on the offensive line: Sunny Jani, as Administrator of the Estate of Michael L. Webster, deceased, v. Bert Bell/Pete Rozelle NFL Player Retirement Plan, et al. , No. 1:04-cv-01606-WDQ U.S. District Court for the District of Maryland, 2005.

188 Douglas Ell, who has handled—and won:Author interview with Douglas Ell.

189 The NFL paid Groom Law Group $2.9 million:IRS Form 5500.

190 Delvin Williams, a former 49ers and Miami Dolphins running back:Author interview with Delvin Williams.

191 As a teenager in France, he had joined the partisans:Author interview with Loewy.

191 Instead of an answer, the next month the administrator sent: Fred Loewy et al. v. Motorola, Inc. Pension Plan et al., No. CV 03-2284 (District of Arizona, 2004).

198 happy dance:Homage to Gail Collins.

198 companies maintained they could receive the subsidy:Ellen E. Schultz and Theo Francis, “U.S. Drug Subsidy Benefits Employers,” The Wall Street Journal, January 4, 2004.

204 shift the risk to the PBGC:For a detailed look at the most prominent instances of companies passing the buck to the PBGC, see Fran Hawthorn, Pension Dumping: The Reasons, the Wreckage, the Stakes for Wall Street (New York: Bloomberg, 2008), and articles by Mary Williams Walsh of The New York Times, who has also provided extensive coverage of the fate of pension plans in bankruptcies, particularly at automakers and airlines.

206 Many excellent books have been written:Among them: Teresa Ghilarducci, When I’m Sixty-four: The Plot Against Pensions and the Plan to Save Them (Princeton: Princeton University Press, 2008); Karen Ferguson and Kate Blackwell, Pensions in Crisis: Why the System Is Failing America and How You Can Protect Your Future (New York: Arcade Publishing, 1995). This lucid and readable book focuses on pensions, but it has an excellent discussion of the problems with 401(k)s and other defined contribution plans, and it clearly explains “discrimination” rules. Recent reports on 401(k)s include The Failure of the 401(k), a report by Robert Hiltonsmith, a policy analyst at Demos, November 2010: http://www.demos.org/pubs/thefailureofthe401(k).pdf. See also Private Pensions: Some Key Features Lead to an Uneven Distribution of Benefits, GAO-11-333, March 2011, http://www.gao.gov/new.items/d11333.pdf. The Congressional Research Service has done a number of studies on 401(k)s, including 401(k) Plans and Retirement Savings: Issues for Congress, July 2009. Its reports can be found on the CRS Web site: http://www.pensionrights.org/report-topic-areas/defined-contribution-plans-such-401ks-and-iras.