I was thrilled to receive our first trade review of a remarkable whistle-blowing book from veteran financial reporter at the Wall Street Journal, Ellen E. Schultz, which publishes in September. We’ve also just learned that Ellen will be on NPR’s Morning Edition on 9/12. I’m confident that this is just the beginning of a terrific publicity campaign, engineered by Schultz’s brilliant team at Penguin’s Portfolio and Angela Hayes of Goldberg McDuffie, who has to be one of the top business book PR people in the business.
Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of American WorkersEllen E. Schultz. Penguin/Portfolio, $26.95 (256p) ISBN 978-1-59184-333-7
The retirement crisis is no accident, claims Wall Street Journal investigative reporter Schultz; large companies have played a significant role in its creation to protect the wealth of its top executives. When GE, IBM, Verizon, and others slashed pensions and medical benefits for millions of American retirees, they pointed fingers everywhere but at themselves–but who was really at fault? Pension funds were not bleeding the companies of cash. GE hadn’t contributed a cent to the workers’ pension plans since 1987, but still had enough money to cover all current and future retirees. Executive pensions at GE, with a $6 billion obligation, are a drag on earnings. These are largely hidden, however, lumped in with the figures for regular pensions. Schultz’s methodical cataloguing of these abuses paints a highly unflattering picture of companies that cut benefits to boost earnings, lay off older workers who are entering the years in which their pensions will spike, inflate retiree health benefits to boost profits, lobby for laws that keep the system inequitable, hoard death benefits, and fire whistle-blowers. Heartbreaking stories of destitute seniors are juxtaposed with the obscene surpluses in pension funds for executives ($25 billion at GE; $24 billion at Verizon; $20 billion at AT&T)–and unless the global retirement industry is reined in, Schultz points out, it will continue to capture retirement wealth earned by many to enrich a relative few, and within our lifetimes, “retirement” will inevitably revert to what it was in the 1930s and before. A fascinating, troubling exposé and a sobering call to arms. (Sept.)