Corpo's Steal Workers' Pensions to Pay for Executive Bennies

How many times have I said this: "Just when you think they've hit bottom and done the worst they could possibly do, Corporate America finds a new low to explore." Well, I'm saying it again because a startling account in none other than the Wall Street Journal shows how a number of corporations have taken to raiding their employees' pensions in order to pay for the extraordinary benefits they've promised their executives. (Via The Mississippifarian)

In recent years, companies from Intel Corp. to CenturyTel Inc. collectively have moved hundreds of millions of dollars of obligations for executive benefits into rank-and-file pension plans. This lets companies capture tax breaks intended for pensions of regular workers and use them to pay for executives' supplemental benefits and compensation.

The practice has drawn scant notice. A close examination by The Wall Street Journal shows how it works and reveals that the maneuver, besides being a dubious use of tax law, risks harming regular workers. It can drain assets from pension plans and make them more likely to fail. Now, with the current bear market in stocks weakening many pension plans, this practice could put more in jeopardy.

How many is impossible to tell. Neither the Internal Revenue Service nor other agencies track this maneuver. Employers generally reveal little about it. Some benefits consultants have warned them not to, in order to forestall a backlash by regulators and lower-level workers.

The background: Federal law encourages employers to offer pensions by giving companies a tax deduction when they contribute cash to a pension plan, and by letting the money in the plan grow tax free. Executives, like anyone else, can participate in these plans.

But their benefits can't be disproportionately large. IRS rules say pension plans must not "discriminate in favor of highly compensated employees." If a company wants to give its executives larger pensions -- as most do -- it must provide "supplemental" executive pensions, which don't carry any tax advantages.

The trick is to find a way to move some of the obligations for supplemental pensions into the plan that qualifies for tax breaks. Benefits consultants market sophisticated techniques to help companies do just that, without running afoul of IRS rules against favoring the highly paid.

(emphasis added)

So they're stealing the pensions as a tax dodge??

You know, I wouldn't be so surprised if they were stealing our money to shore up their sagging stock prices (Jack "The Axe" Welch in the late 80's) or to cover up expensive management mistakes (the airlines in the late 90's and early 'oughts). It would be just as abhorrent but at least it would be understandable. But to have these guys stealing our futures so cavalierly, merely to pay a tad less of their tax obligation while they're raking in more in salary than most of us make in a year is worse than theft. It's insulting.

We have become so unimportant, so microscopic a part of their world that they can steal from us with impunity for the slimmest of reasons and think no more about it than you do when you crush an ant under your heel at a picnic. Our retirements for a tax dodge. How insignificant can you get?

This is bare-nekkid Corporate America, shorn of all its pretense, without covering or masking of any kind: thoughtlessly cruel, mindlessly selfish, automatically, brain-numbingly greedy. The underclass has been targeted by them for 30 years. They have given our jobs to slaves and left us scrabbling for scraps, stolen our health care, even taken our lives if saving them was too much trouble or expense. They destroyed our past and violated our present without so much as batting an eye. Now they're sabotaging our future while hardly noticing we had one before they came along. Thirty years, and in all that time no one has done anything to stop any of it.

Now that they're working on the middle class, maybe someone will finally pay some attention to the highway robbery that has become common as dirt in the last 8 years. But if you want money down? Here's the bet:

Not one executive in one of the corpo's breaking this law and thieving other people's money will ever see a day in court, let alone jail. You can take that to the bank.

Where an executive will no doubt steal it.