You wouldn’t think defined contribution pension plans, 401(k)s, health care plans, and executive deferred compensation plans would make for a great nonfiction mystery tale. Well, they do when the writer is Ellen Schultz, an investigative reporter for the Wall Street Journal. She carefully details in her book *Retirement Heist *how the executive suite bolstered its benefits at the expense of the ordinary worker.
Once again, the story of our era is that the rich get richer and everyone else is left farther behind. Problem is, unlike executive pay and stock options this “heist” was far more subtle and opaque.
This is the hidden history of the retirement crisis–a story that hasn’t been made to Fox News, the Huffington Post, or even Comedy Central. This retirement heist has produced a transfer of benefits earned by three generations of post-World War 11 middle-clas workers to a comparatively small cohort of company executives, shareholders, and the financial industry that orchestrated the plunder.
If employers continue to control the retirement system and manage it for their own benefit, then within our lifetimes, “retirement” will inevitably revert to the 1930s and before. Society–and taxpayers–will be paying for services to support millions of elderly, formerly middle class Americans.
Sad to say, after looking at Shultz’s carefully reported case she can’t be accused on trading in hyperbole.
Forget Social Security. It receives all the attention with an aging population. But the Social Security safety net is remarkably transparent and sound compared to what’s going on with pensions. Social Security isn’t a Ponzi scheme.
There are reasons why ordinary American workers face bleak financial prospects when it comes to retirement, and it isn’t only the devastating impact of the Great Recession–far from it. Her tale about declining employee benefits is a parallel tale to the four-decade long rise income inequality and wage stagnation. It has taken a long time to come to the current gloomy situation with respect to retirement.
High paid executives, pension consultants, industry lobbyists, well-heeled lawyers and Wall Street financiers all conspired to loot the pension fund piggy bank. Once well-funded pension plan surpluses are gone, “sold, traded, siphoned, diverted to creditors, used to finance executive pay, parachutes, and pensions,” she writes.
I just got to my copy this morning. I’ve skimmed it, and after I give it a careful read I’ll post some other thoughts. But I can already see that Shultz manages to make one of the most abstruse parts of the financial world remarkably clear. Much of the book comes from front-page articles she has done over the years for the Wall Street Journal. That doesn’t lessen the impact. It’s a compelling putting them all together with additional information and reporting. The *Retirement Heist * does what investigative journalism is supposed to do: Shed light on a dark corner of our society.
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