Ellen Schultz

  • Aired:  10/17/11
  •  | Views: 69,068

Investigative reporter Ellen Schultz talks about how corporations deliberately deceived their employees and Congress to profit from workers' pensions. (7:30)

WELCOME BACK.

MY GUEST TONIGHT AN

INVESTIGATIVE REPORTER WHOSE

NEW BOOK IS CALLED RETIREMENT

HEISTS, HOW COMPANIES PLUNDER

AND PROFIT FROM THE NEST EGGS

OF AMERICAN WORKERS.

PLEASE WELCOME TO THE PROGRAM

ELLEN SCHULTZ.

( APPLAUSE )

THANK YOU FOR BEING HERE.

>> THANKS FOR HAVING ME.

>> Jon: THE BOOK IS CALLED

RETIREMENT HEIST.

I DID NOT THINK... AND I'VE

THOUGHT A LOT ABOUT THIS

FINANCIAL CRISIS.

I DID NOT THINK THERE WAS

ANOTHER PIECE OF INFORMATION

THAT I CAN LEARN THAT COULD

STILL MAKE ME ANGRY.

THANK YOU.

>> ANY TIME.

>> Jon: THANK YOU FOR LETTING

ME KNOW I CAN STILL FEEL.

THIS BOOK IS ABOUT HOW

CORPORATIONS HAVE TAKEN

GIGANTIC WORKER PENSION FUNDS

AND JUST TAKEN THEM.

>> THEY'VE MANAGEDED TO TAKE

THE RETIREMENT PLANS FOR

MILLIONS, 44 MILLION PEOPLE,

AND TURN THEM INTO PROFIT

CENTERS FOR THE COMPANIES.

NOW PEOPLE ARE COMPLAINING

THAT THE PLANS ARE UNDERFUNDED

BUT THEY WERE FULLY FUNDED.

IN FACT THERE WAS A QUARTER

TRILLION SURPLUS AS RECENTLY

AS TEN YEARS AGO.

>> Jon: WHAT WOULD THEY DO?

YOU SAY THE PENSION FUND HAS A

SURPLUS.

THAT MEANS THE COMPANY, THE

WORKERS PAY INTO IT.

THERE'S A MANDATE THAT YOU

HAVE TO FUND THESE PENSIONS.

SO THEY HAVE A QUARTER

TRILLION SURPLUS.

HOW DID THEY DRAIN THAT?

WHAT DID THEY DO?

>> A NUMBER OF THINGS.

THEY SYPHONED MONEY OUT TO PAY

FOR RESTRUCTURING, I.E.,

GETTING RID OF OLD PEOPLE.

THEY USED SOME OF IT TO PAY

THEIR EXECUTIVES, PARACHUTES.

>> Jon: IF YOU GET A GOLDEN

PARACHUTE AS THEY CALL IT,

THAT MONEY COMES OUT OF THE

PENSION FUND THAT THEY HAVE

SET ASIDE FOR WORKERS.

>> THERE ARE WAYS TO DO THAT,

YES.

IT'S TAKE ADVANTAGE OF REALLY

TRICKY LOOPHOLES.

THEY ACTUALLY ALSO SOLD US IN

DEALS.

>> Jon: M-AND-A, OBVIOUSLY YOU

AND ARE INSIDERS.

>> I'M SORRY ABOUT THAT.

YOU COULD SELL A UNIT AND THEN

JUST SELL THEM SOME OF THE

EXTRA PENSION.

>> Jon: SO YOU WOULD, LET'S

SAY, COME IN AND BUY A

COMPANY.

AND PART OF THAT COMPANY IS WE

HAVE $2 BILLION IN PENSION.

AND YOU TAKE THAT AND DO WHAT

WITH IT?

>> YOU TAKE IT BUT THEN YOU

GET ANOTHER $500 MILLION EXTRA.

YOU JUST PAY 7 CENTS ON THE

DOLLAR FOR THAT.

>> Reporter: YOU DON'T PAY

THEM THE PENSIONS THAT THEY

THOUGHT THEY WERE GOING TO

GET.

YOU PAY THEM LESS.

AND THAT EXTRA MONEY YOU PUT

ON YOUR LEDGER AS PROFIT.

>> YOU CAN KEEP SOME OF THAT

EXTRA MONEY, YES.

TRUE, ALL OF THESE MECHANISMS

COMPANIES TOOK WHAT WAS REALLY

A PERFECTLY HEALTHY SYSTEM AND

JUST RAN THEM INTO THE ROUND.

THEY'RE COMPLAINING ABOUT THE

COST OF THE RETIREES.

>> Jon: WHY CAN YOU DO THAT?

>> WELL, THERE ARE LOTS OF

CLEVER LOOPHOLES.

AND COMPANIES HAVE CONVINCED

CONGRESS TO LET THEM DO ALL

SORTS OF THINGS OVER THE YEARS

CLAIMING IT WAS GOOD FOR

RETIREMENT SECURITY.

WHAT'S REALLY DISAPPOINTING IS

THAT WHILE THEY WERE DOING

THIS FOR EVERYBODY, THEY WERE

BOOSTING THE PENSIONS FOR THE

EXECUTIVES SO ALL OF THESE

CHANGES WHICH DECIMATED THE

RETIREMENT PLANS FOR MILLIONS

WERE BOOSTING THE PAY AND THE

PENSIONS FOR THE TOP 1%.

>> Jon: IT MAKES ME WANT TO A

(BEEP) ON A POLICE CAR.

AND I SAY THAT WITH ALL DUE

RESPECT.

I KNOW THE POLICE ARE DOING

THE BEST THEY CAN.

(GRUNTING)

WHY ISN'T THIS MORE PUBLIC

KNOWLEDGE?

IT'S SURPRISING TO ME THAT

THIS ENORMOUS... ALL WE'VE

HEARD ABOUT IS THESE

CORPORATIONS HAVING TO

RENEGOTIATE WITH THEIR WORKERS

THE IDEA THAT YOUR RETIREMENT

FUND IS THE ALBATROSS AROUND

THE COMPANY'S NECK.

>> THEY HAVE MANAGED TO KEEP

THIS PRETTY QUIET OVER THE

YEARS.

IT'S COMPLICATED MANEUVERS AND

COMPANIES HAVE DELIBERATELY

DECEIVED PEOPLE.

THEY'VE DECEIVED THE EMPLOYEES

AND CONGRESS.

I'LL GIVE YOU ON AN EXAMPLE.

ONE WAY THEY FINANCE THESE

HUGE EXECUTIVE PENSIONS WHICH

SOME COMPANIES LIKE GE IS IS

UP TO $6 BILLION.

>> Jon: UP TO $6 BILLION IN?

>> EXECUTIVE PENSIONS.

>> Jon: $6 BILLION IN

EXECUTIVE PENSIONS.

>> THAT'S HOW MUCH THEY OWE

THEIR EXECUTIVES.

>> Jon: $6 BILLION.

>> YES.

THEY EARNED IT.

>> Jon: HOW MANY EXECUTIVES?

DO THEY HAVE SIX BILLION

EXECUTIVES?

>> THEY DON'T DISCLOSE IT BUT

WHAT THEY OWE THEM IS ABOUT

15% OF WHAT THEY TO 500,000.

>> Jon: THAT COUNTS AGAINST

EVERYBODY ELSE'S FUNDED

PENSIONS?

>> IT COUNTS AS PART OF THE

LIABILITY, SURE.

SO WHEN COMPANIES COMPLAIN

ABOUT THEIR COSTLY RETIREES

THEY OFTEN DON'T POINT OUT THE

FACT THAT IT'S THE EXECUTIVES

THAT ARE COSTLY.

LIKE OMNI CARE, WHEN THE

EXECUTIVE RETIRED HE GOT $100

MILLION BUT THEY FROZE THE

PLAN FOR EVERYBODY ELSE.

FINANCING THIS STUFF THOUGH IS

WHAT REALLY SURPRISEDED ME.

THEY HAVE TAKEN OUT BILLIONS

OF DOLLARS OF LIFE INSURANCE

ON WORKERS AND THEY USE THE

LIFE INSURANCE AS EXECUTIVE

PENSION FUNDS.

>> Jon: WHO TOOK OUT LIFE

INSURANCE ON THE WORKERS.

>> NESTLE, WAL-MART, DISNEY.

>> Jon: YOU'RE ALLOWED TO TAKE

A LIFE INSURANCE POLICY ON A

WORKER.

DO THEY KNOW THAT THEY HAVE A

LIFE INSURANCE POLICY ON THEM?

>> THEY'RE SUPPOSED TO KNOW

THESE DAYS BUT THERE ARE

MILLIONS OF PEOPLE WHO HAVE NO

IDEA.

>> Jon: CAN I JUST LIKE GO OUN

THE STREET AND GO, THAT GUY IS

OLD.

I'M GOING TO TAKE OUT A POLICY

ON HIM?

HOW CAN YOU HOLD A LIFE

INSURANCE POLICY ON SOMEONE

WHO IS NOT IN YOUR FAMILY?

>> INITIALLY THEY WERE SAYING

TO CONGRESS, WELL, IF WE LOSE

A PART-TIME CLERK WHO HAS NO

BENEFITS IT'S GOING TO COST US

MONEY TO HAVE TO RETRAIN THEM.

CONGRESS SAID SURE DO THAT.

CONGRESS GOT TIRED OF THAT.

THEN THEY CONVINCED CONGRESS

THAT THEY NEEDED TO DO TO PAY

FOR RETIREEE BENEFITS.

THEY DIDN'T SAY EXECUTIVE

RETIREEE BENEFITS.

>> Jon: BY THEM BUYING LIFE

INSURANCE POLICIES I'M ONLY

ASSUMING THAT IS PROFIT THAT

GOES INTO AN INSURANCE COMPANY

AS WELL.

SO THEY'VE CREATED A SORT OF A

SELF SUSTAINING SYSTEM FOR

THEM.

>> NO IT'S LIKE A GIANT TAX

SHELTER.

WHEN THE EMPLOYEES OR THE

EX-EMPLOYEES OR THE RETIREES

DIE, THE DEATH BENEFIT IS TAX

FREE TO THE COMPANY.

>> Jon: THAT'S WHAT ALL THOSE

CAKES AND PARTIES ARE AT

CORPORATIONS.

THEY ALWAYS SAY IT'S FOR YOUR

BIRTHDAY BUT CHANCES ARE...

(LAUGHING).

THIS IS IS REMARKABLE.

AGAIN IT'S VERY EASY TO GET

INTO THIS IDEA THAT ALL

CORPORATIONS YOU CAN DEMONIZE

EVERYTHING THEY DO.

OBVIOUSLY THEY'VE DONE A GREAT

SERVICE AND AN ENGINE FOR THE

ECONOMY.

BUT THIS HAS GOTTEN WAY OUT OF

HAND.

>> IT'S... THEIR HANDS ARE IN

EVERYTHING.

VIRTUALLY EVERY RECOMMENDATION

THAT COMPANIES MAKE TO IMPROVE

RETIREMENT SECURITY

ESSENTIALLY HELPS IMPROVE

THEIR BOTTOM LINE.

IT DOESN'T IMPROVE ANYTHING

FOR THE EMPLOYEE.

>> Jon: WE'RE JUST TALKING

ABOUT PRIVATE PENSIONS RIGHT

NOW.

THIS IS NOT THE PUBLIC PENSION

SYSTEM.

THIS IS NOT ANYTHING OTHER

THAN THE WAY THAT THESE OTHER

CORPORATIONS CAN MANIPULATE.

TO BE FAIR TO THEM IF THE

ECONOMY TANKS....

>> THE STOCK MARKET GOING DOWN,

BUT YOU STARTED OUT WITH IF

YOU WERE LIKE VERIZON AND YOU

STARTED OUT WITH 24 MILLION

SURPLUS YOU KNOW THAT STOCK

MARKETS GO DOWN AND INTEREST

RATES CAN FALL AND YOU KNOW

THAT PEOPLE GET OLDER.

>> Jon: I HAVE TO TAKE ALL

THAT MONEY OUT TO BUY PHONE

CASES.

RETIREMENT HEIST.

IT'S ON THE BOOK SHELVES NOW.

READ IT WITH A GLASS OF WINE.

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