The Realist Idealist

Yes, the pensions of the 1990’s are slowly disappearing. It makes sense - companies have been negotiating with unions and the like with promises that, as demographics have shifted (people began living longer and retiring earlier), they cannot afford over the long term.

But, it’s worse than that.

Cash invested in Pensions is tax deductible. So now corporate executives looking to make sure they are taken care of when they retire or the going gets rough (e.g. - now) and are forced to file for bankruptcy have begun placing their “deferred compensation” into the mix with employee pensions. It saves the company millions (making net income look more desirable) - and cuts the Federal Government out of millions of dollars in revenue.

Of course, this is illegal most of the time - but it seems that if you pay a “benefits” consultant enough, you have nothing to worry about (just finagle with the $ ratios by grouping some execs with some lower paid employees and you’re all set). No worries!

Oh, to finish up! Execs can freeze employee pensions and still take the golden parachute legally - which means once they set the ratio how they want - they can just freeze others out and be on their way.

Click here to read the full story in the Wall Street Journal