One Way Workers Become Worth Less Alive Than Dead
Sudhama Ranganathan | 31.08.2012 22:39 | Repression | Social Struggles | Workers' Movements | World
Often enough in the country I live in, America, the idea corporations are helmed by heartless people that don't care about the welfare of the workers underneath them, is attributed to propaganda from the political left. In fact, the only party in America (as we really have only 2 choices) that is associated with the left often marginalizes such talk, except when they are campaigning of course. We have been fed a steady diet laced with the idea all things favoring "workers are bad." This has been going on at least since the early 1980's, and, whether Republican administrations in talk backed up by action or Democratic administrations in actions that go against their rhetoric, workers have been labeled as bad guys while corporations are presented as victims.
And why not as victims? They are already viewed as individual persons by the Supreme Court. Apparently, though they can't have kids, can't get sick, can't get drafted and serve in the military, can't face the death penalty or a life sentence, can't biologically get into the world to be born or cross over into death, somehow they are just as valuable individuals in a nation born to protect the rights of the individual first. Perhaps my laptop's an individual. (No response...)
We have even come to think of corporations that way, and they perpetuate this image. They crush workers unions and, instead of saying "go stew," as they do in countries run by dictators or "this is for the common good" as they do in communist nations, they put out phony stats purporting the falsehood unions make them unable to compete. In some cases there were overreaches with regards to retirement compensation, and they would trot out the most egregious examples and have belt buckle shining talk show hosts and commercials trumpet these as though they were examples of the norm as opposed to exceptions. They had politicians on both sides of the isle, Democrat and Republican, backing them up and pitching their case.
However, what they don't say is that much of this was a scheme perpetrated by corporations to illicit sympathy so they could hustle people out of their pensions. As an article in Forbes points out, "Two decades ago, pensions were well funded, due to laws and regulations passed in the 1970s and 1980s. By 2000, pension plans at many large companies had large surpluses that would have covered all current and future retirees' pensions without them having to contribute anything.
"Yet US firms found ways to siphon off billions of dollars in assets from the pension plans. Verizon used assets to finance downsizings. GE sold pension surpluses in restructuring deals, indirectly converting pension assets into cash. Many firms clandestinely cut benefits, using 'actuarial sleight of hand to disguise the cuts.'
"The masterminds of this heist should take a bow: They managed to take hundreds of billions of dollars in retirement benefits that were intended for millions of workers and divert them to corporate coffers, shareholders, and their own pockets. And they're still at it. It might not be possible to resuscitate pension plans, but it isn't too late to expose the machinations of the retirement industry, which has its tentacles into every type of retirement benefit: profit-sharing plans, 401(k)s, employee stock ownership plans (ESOPs), and plans for public employees, nonprofits, small businesses, and even churches. The retirement industry has exported its tactics, using them to achieve similar outcomes in retirement plans in Canada, Europe, Australia, and elsewhere, and has big plans for Social Security and its overseas equivalents as well. Unless it is reined in, the global retirement industry will continue to capture retirement wealth earned by many to enrich a relative few." (
http://www.forbes.com/sites/stevedenning/2011/10/19/retirement-heist-how...)
While they were selling us on the idea they were going broke, corporations were quietly drafting plans to thieve, or were thieving, retirement funds from people. These victims are our grandparents. They are our parents. They are all of us. It's still happening in different ways, and though he is aware of it, President Obama has done nothing to stop it. Quite to the contrary, his car czar Steven Rattner actually approved of raiding GM's pension funds to help wipe away it's debt, though that is illegal. "In 1974, after a series of scandalous take-downs of pension and retirement funds during the Nixon era, Congress passed the Employee Retirement Income Security Act. ERISA says you can't seize workers' pension funds (whether monthly payments or health insurance) any more than you can seize their private bank accounts. And that's because they are the same thing: workers give up wages in return for retirement benefits.
"The law is [...] explicit that grabbing pension money is a no-no. Company executives must hold these retirement funds as 'fiduciaries.' Here's the law [...] as described on the government's own web site under the heading, 'Health Plans and Benefits.'
"'The primary responsibility of fiduciaries is to run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits.'" ( http://www.gregpalast.com/grand-theft-auto-how-stevie-the-rat-bankrupted...)
The president's appointee, Steven Rattner, was sued by the State of New York in 2010 for his involvement in pension kickback schemes. Apparently he isn't opposed to fondling people's savings so long as he doesn't get caught or it's signed off on by the president. He agreed to settle out of court with the State of New York, paying $10 million for getting his hands on other people's stuff. ( http://www.oregonlive.com/business/index.ssf/2010/12/steven_rattner_sett...)
Corporations and high powered elected and government officials are willing to touch your money through pensions, but the callousness goes beyond this. Corporations in the 1980's began taking out life insurance policies on their workers. Not just the "key men," for whom the plans were intended initially, but janitors, part time clerks and more, many of whom didn't even qualify for benefits themselves from those companies. As noted in an article by Joe Mont, for Yahoo Finance, "At a November forum hosted by the New America Foundation, the Pension Rights Center and AARP, Ellen Schultz, a former investigative reporter for The Wall Street Journal who has covered 'dead peasant' policies, spoke of a twist on the tactic and how it has evolved since the 1980s.
"'The reason they did this primarily back then was as a tax dodge, because life insurance policies are almost like a giant IRA -- you put a bunch of money in it and it grows tax deferred,' she says. 'But it morphed into something a little different in the 2000s. What it changed into, essentially, was vehicle for financing executive pensions and pay ... You can't set up a special tax-sheltered plan for executives because you don't get tax breaks, but you can buy life insurance on tens of thousands of your workers and you essentially set up a de facto pension fund for executive pay.'" ( http://finance.yahoo.com/news/why-company-may-want-dead-133000171.html)
When the former workers die, executives get their pensions funded tax free. This of course is while all the rest of us have our pension funds frozen, raided or terminated all together. Some might have the impression normal worker's pension obligations dwarf those of executives and that's why they were kept and yours and mine were nixed, but that is not necessarily the case.
The truth was revealed in an article in Forbes, when it asked Ellen Schultz the same question. She stated, "Not necessarily. Look at Massey Energy (Eds: now part of Alpha Natural Resources). Last year, they had a huge Big Branch mining disaster. Dozens of miners were killed. The CEO was pushed out. He was given a retirement package that was worth $55 million. And the total payout for the coal miners, for black lung, traumatic workers compensation which means severe injury, and pensions and health care, that all came to $37 million, and that's for thousands of people. True, their costs will be ongoing, but it does put the magnitude into perspective." ( http://www.forbes.com/sites/emilylambert/2011/10/03/has-your-retirement-...)
Getting back to the "janitor's insurance" or "dead peasant insurance," a story about one family's plight kind of puts it into perspective, "Most families have no clue that their relatives are covered. Irma Johnson certainly didn't. Her husband, Daniel, had been a credit risk manager for Southwest Bank of Texas, which was a predecessor to Amegy bank. He was diagnosed with two cancerous brain tumors in 1999 and underwent two surgeries and radiation treatment that initially impaired his speech and left him unable to walk. He eventually returned to work, but in 2000 the bank criticized his communication skills and job performance and demoted him.
"Despite the demotion, in May 2001, a manager took Daniel aside and told him that the compensation committee of the board of directors had selected him to be eligible for supplemental life insurance of $150,000. All he had to do was sign an agreement to receive the coverage, and a consent form authorizing the bank to purchase a life insurance policy on his life. Four months later, the bank fired him. When Daniel died in August, 2008 his family received no life insurance benefits, because the company had terminated the family's life insurance policy when it fired him.
"Irma Johnson says her husband didn't have the necessary capacity to make financial decisions when he signed the agreement in 2001, and the bank should have told him how much it would get when he died. She sued in state court in Houston in February 2009; under Texas law, material omissions can constitute a form of fraud. During the proceedings, Irma learned that the bank, which maintained that the bank had bought the policies to offset the costs of providing 'employee benefits,' had received $4.7 million when her husband died. It settled the case in 2010 for an undisclosed sum." (Schultz 2011 http://books.google.com/books?id=qNsMta3gPy4C&pg=PT96&lpg=PT96&dq=irma+j...)
While these corporations and the politicians that make excuses for them claim they have no money, the corporations put cash into paying for death policies on our heads to fund executive pensions and benefits. Who decides to raid the pensions? It ain't the part time clerks? Those executives get bonuses for stuff like that - bonuses they or their companeros create. When you hear the president attacking his opponent for callousness towards employees and American workers, remember Steven Rattner. President Obama is no better or worse than Mitt Romney outside of talk. On the big issues, they are the same in action, and different in talk.
They both just want to get elected, after that, how much time will either really spend considering what's good for American workers versus large corporate donors? Makes for nice TV. But, it never covers up or makes up for the heartlessness of their funders - the people they keep on making excuses for and bailing out. That's both sides of the isle.
To read about my inspiration for this article go to www.lawsuitagainstuconn.com.
We have even come to think of corporations that way, and they perpetuate this image. They crush workers unions and, instead of saying "go stew," as they do in countries run by dictators or "this is for the common good" as they do in communist nations, they put out phony stats purporting the falsehood unions make them unable to compete. In some cases there were overreaches with regards to retirement compensation, and they would trot out the most egregious examples and have belt buckle shining talk show hosts and commercials trumpet these as though they were examples of the norm as opposed to exceptions. They had politicians on both sides of the isle, Democrat and Republican, backing them up and pitching their case.
However, what they don't say is that much of this was a scheme perpetrated by corporations to illicit sympathy so they could hustle people out of their pensions. As an article in Forbes points out, "Two decades ago, pensions were well funded, due to laws and regulations passed in the 1970s and 1980s. By 2000, pension plans at many large companies had large surpluses that would have covered all current and future retirees' pensions without them having to contribute anything.
"Yet US firms found ways to siphon off billions of dollars in assets from the pension plans. Verizon used assets to finance downsizings. GE sold pension surpluses in restructuring deals, indirectly converting pension assets into cash. Many firms clandestinely cut benefits, using 'actuarial sleight of hand to disguise the cuts.'
"The masterminds of this heist should take a bow: They managed to take hundreds of billions of dollars in retirement benefits that were intended for millions of workers and divert them to corporate coffers, shareholders, and their own pockets. And they're still at it. It might not be possible to resuscitate pension plans, but it isn't too late to expose the machinations of the retirement industry, which has its tentacles into every type of retirement benefit: profit-sharing plans, 401(k)s, employee stock ownership plans (ESOPs), and plans for public employees, nonprofits, small businesses, and even churches. The retirement industry has exported its tactics, using them to achieve similar outcomes in retirement plans in Canada, Europe, Australia, and elsewhere, and has big plans for Social Security and its overseas equivalents as well. Unless it is reined in, the global retirement industry will continue to capture retirement wealth earned by many to enrich a relative few." (
http://www.forbes.com/sites/stevedenning/2011/10/19/retirement-heist-how...) While they were selling us on the idea they were going broke, corporations were quietly drafting plans to thieve, or were thieving, retirement funds from people. These victims are our grandparents. They are our parents. They are all of us. It's still happening in different ways, and though he is aware of it, President Obama has done nothing to stop it. Quite to the contrary, his car czar Steven Rattner actually approved of raiding GM's pension funds to help wipe away it's debt, though that is illegal. "In 1974, after a series of scandalous take-downs of pension and retirement funds during the Nixon era, Congress passed the Employee Retirement Income Security Act. ERISA says you can't seize workers' pension funds (whether monthly payments or health insurance) any more than you can seize their private bank accounts. And that's because they are the same thing: workers give up wages in return for retirement benefits.
"The law is [...] explicit that grabbing pension money is a no-no. Company executives must hold these retirement funds as 'fiduciaries.' Here's the law [...] as described on the government's own web site under the heading, 'Health Plans and Benefits.'
"'The primary responsibility of fiduciaries is to run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits.'" (
http://www.gregpalast.com/grand-theft-auto-how-stevie-the-rat-bankrupted...) The president's appointee, Steven Rattner, was sued by the State of New York in 2010 for his involvement in pension kickback schemes. Apparently he isn't opposed to fondling people's savings so long as he doesn't get caught or it's signed off on by the president. He agreed to settle out of court with the State of New York, paying $10 million for getting his hands on other people's stuff. (
http://www.oregonlive.com/business/index.ssf/2010/12/steven_rattner_sett...) Corporations and high powered elected and government officials are willing to touch your money through pensions, but the callousness goes beyond this. Corporations in the 1980's began taking out life insurance policies on their workers. Not just the "key men," for whom the plans were intended initially, but janitors, part time clerks and more, many of whom didn't even qualify for benefits themselves from those companies. As noted in an article by Joe Mont, for Yahoo Finance, "At a November forum hosted by the New America Foundation, the Pension Rights Center and AARP, Ellen Schultz, a former investigative reporter for The Wall Street Journal who has covered 'dead peasant' policies, spoke of a twist on the tactic and how it has evolved since the 1980s.
"'The reason they did this primarily back then was as a tax dodge, because life insurance policies are almost like a giant IRA -- you put a bunch of money in it and it grows tax deferred,' she says. 'But it morphed into something a little different in the 2000s. What it changed into, essentially, was vehicle for financing executive pensions and pay ... You can't set up a special tax-sheltered plan for executives because you don't get tax breaks, but you can buy life insurance on tens of thousands of your workers and you essentially set up a de facto pension fund for executive pay.'" (
http://finance.yahoo.com/news/why-company-may-want-dead-133000171.html) When the former workers die, executives get their pensions funded tax free. This of course is while all the rest of us have our pension funds frozen, raided or terminated all together. Some might have the impression normal worker's pension obligations dwarf those of executives and that's why they were kept and yours and mine were nixed, but that is not necessarily the case.
The truth was revealed in an article in Forbes, when it asked Ellen Schultz the same question. She stated, "Not necessarily. Look at Massey Energy (Eds: now part of Alpha Natural Resources). Last year, they had a huge Big Branch mining disaster. Dozens of miners were killed. The CEO was pushed out. He was given a retirement package that was worth $55 million. And the total payout for the coal miners, for black lung, traumatic workers compensation which means severe injury, and pensions and health care, that all came to $37 million, and that's for thousands of people. True, their costs will be ongoing, but it does put the magnitude into perspective." (
http://www.forbes.com/sites/emilylambert/2011/10/03/has-your-retirement-...) Getting back to the "janitor's insurance" or "dead peasant insurance," a story about one family's plight kind of puts it into perspective, "Most families have no clue that their relatives are covered. Irma Johnson certainly didn't. Her husband, Daniel, had been a credit risk manager for Southwest Bank of Texas, which was a predecessor to Amegy bank. He was diagnosed with two cancerous brain tumors in 1999 and underwent two surgeries and radiation treatment that initially impaired his speech and left him unable to walk. He eventually returned to work, but in 2000 the bank criticized his communication skills and job performance and demoted him.
"Despite the demotion, in May 2001, a manager took Daniel aside and told him that the compensation committee of the board of directors had selected him to be eligible for supplemental life insurance of $150,000. All he had to do was sign an agreement to receive the coverage, and a consent form authorizing the bank to purchase a life insurance policy on his life. Four months later, the bank fired him. When Daniel died in August, 2008 his family received no life insurance benefits, because the company had terminated the family's life insurance policy when it fired him.
"Irma Johnson says her husband didn't have the necessary capacity to make financial decisions when he signed the agreement in 2001, and the bank should have told him how much it would get when he died. She sued in state court in Houston in February 2009; under Texas law, material omissions can constitute a form of fraud. During the proceedings, Irma learned that the bank, which maintained that the bank had bought the policies to offset the costs of providing 'employee benefits,' had received $4.7 million when her husband died. It settled the case in 2010 for an undisclosed sum." (Schultz 2011
http://books.google.com/books?id=qNsMta3gPy4C&pg=PT96&lpg=PT96&dq=irma+j...) While these corporations and the politicians that make excuses for them claim they have no money, the corporations put cash into paying for death policies on our heads to fund executive pensions and benefits. Who decides to raid the pensions? It ain't the part time clerks? Those executives get bonuses for stuff like that - bonuses they or their companeros create. When you hear the president attacking his opponent for callousness towards employees and American workers, remember Steven Rattner. President Obama is no better or worse than Mitt Romney outside of talk. On the big issues, they are the same in action, and different in talk.
They both just want to get elected, after that, how much time will either really spend considering what's good for American workers versus large corporate donors? Makes for nice TV. But, it never covers up or makes up for the heartlessness of their funders - the people they keep on making excuses for and bailing out. That's both sides of the isle.
To read about my inspiration for this article go to www.lawsuitagainstuconn.com.
Sudhama Ranganathan
e-mail:
uconnharassment@gmail.com
Homepage:
www.lawsuitagainstuconn.com