Index

Schultz/RETIREMENT HEIST

INDEX

AARP, 12, 51
accounting issues, 3, 59, 61, 63–70, 95–96, 127n, 135, 140, 178, 179
health plans and, 65–70, 72–73, 76–78, 151–53, 196–97, 199–201
investing pension assets and, 203–4
pension income and, 55–56, 58, 60, 63–64
see also Financial Accounting Standards Board
ACF Industries, 175–76
Ackerman, Chuck, 81–84
Actuarial Sciences Associates (ASA), 12, 20
Advantage Medical Services (AMS), 129
Aetna, 77–78
Air Transportation Stabilization Board, 25
Alcatel SA, 97–98
Amara, Janice, 33
American Benefits Council, 201
American Council of Life Insurers, 124, 132
American Electric Power, 120, 125
American Greetings, 120, 123
American National Can, 173
Amoco Corp., 85–87
Aon Corp., 20, 127
Archer, Bill, 124
Asarco, 170–72
AT&T, 11–12, 51
excess pension assets of, 9, 12, 20
health care reform and, 196–97, 199–200
Lucent and, 11, 88–89, 93, 147
pension cutting at, 36, 46
prescription drug benefits at, 199–201

Bankers Life and Casualty, 119
Bank of America, 34, 208
BOLI at, 126, 130–31
bank-owned life insurance (BOLI), 116, 119–20, 124, 126, 130–32
banks, 2, 22, 26, 93, 205, 209, 214
Beisler, Randy, 186
Bell Atlantic Corp., 13, 58
benefits test, 142–43
Black, Conrad, 147
black lung disease plans, 177–81
Blankenship, Don, 180–81, 211
Boeing, 29, 58–59, 64n, 147
BP, 85–87
Brown, Kyle, 32
Bruggeman, Jim, 38
Buffett, Warren, 63
Bureau of Labor Statistics, 49–50
Bush, George W., 130
Byrne, Robert S., 34

California Public Utilities Commission, 71
Carlson, Gretchen, 200
cash-balance plans, 32–40, 52, 105
comparisons between 401(k)s and, 34–36
lump-sum feature of, 48–49
in pension cutting, 32–39, 42–43, 47–48, 57–58
CAST Management Consultants, 132
Caterpillar Inc., 58, 65, 196, 200
CentralandSouthWest (CSW), 38
CenturyTel, 20–22, 143
Certner, David, 12
Chapman, Basil, 175–76
Chesapeake Energy, 110
Ciesielski, Jack, 69
Cigna:
pension cutting at, 29–35, 52, 53
Supreme Court case on, 52–53
Citigroup Inc., 112, 129, 131
Clark, Richard T., 106
Clark/Bardes, 124, 129–30, 133
Clausen, Norman, 48
CM Holdings, 121–22
Comcast, 210, 212
Congress, U.S., 96, 139, 206
COLI in, 117, 123–24, 129–30
ERISA in, 51–52, 183–85
executive compensation in, 100
health care reform in, 200–201
pension assets in, 16, 23, 33
pension cutting in, 47–48
pension disclosure in, 51–52
prescription drug benefits in, 197–98
ConocoPhillips, 106
Consol Energy, 178–79
Consolidated Freightways Corp. (CFC), 137–38
Constellation Energy, 107, 177
Continental Can, 163, 174
corporate-owned life insurance (COLI), 116–34, 214–15
BOLI and, 116, 119–20, 124, 126, 130–32
as cash-value policies, 118, 131
death benefits of, 5, 116–22, 125, 127–29, 131, 133
death rates and, 120–21
disclosure on, 119, 129–33
executive liabilities and, 116–19, 122, 133
in funding retiree benefits, 124–26, 130–31
insurable interest issue in, 122–23, 128–29
lawsuits on, 120, 123, 125, 128–29
on middle managers, 126–27, 133
obtaining employees’ consent for, 126, 130
payouts of, 116, 118–23, 125, 127–28, 131, 133
rules on, 128, 130–32
coverage test, 140–41
Covington & Burling, 10, 22
Craven, Charlie, 85–88
Crown Cork & Seal, 174
Cummins Inc., 39, 211
Cyprus Mines, 86–87

D’Andrea, Jacqueline, 210
Darbee, Peter, 107
Daugherty, Elmer, 177
death audits, 146, 156, 158
death benefits, 56
of COLI, 5, 116–22, 125, 127–29, 131, 133
cutting of, 80, 92–93, 95–96
Lucent and, 88, 92–97
Deere & Co., 196, 200
Defense Department, U.S., 67–68
in lawsuit with GE, 17–18
deferred compensation, deferred-compensation plans, 43, 55–56, 178, 199, 212–13
COLI and, 117–18, 126, 130–31, 133, 215
executive compensation and, 4–5, 14, 21, 101, 108, 110–13, 117–18, 126, 130–31, 134–39, 180, 203, 208, 210, 212
financing of, 21, 130, 134–36, 138–39
401(k)s and, 101, 110–11, 208
retiree benefits as, 92, 94
risks of, 137–38
rules on, 213, 215
defined benefit plans, 11, 28, 37, 106
defined contribution plans, 43, 101
comparisons between cash-balance and, 36–37
Deloitte & Touche, 39
Delphi, 15, 64n
Delta Air Lines, 14, 26–27, 73
dental coverage, 56, 88, 149
cutting of, 92
detrimental reliance standard, 52–53
Diebold, 120–21
Dillard’s Inc., 105
disability benefits, 53, 177, 178, 181–90
denial of, 181–88
lawsuits on, 183, 185, 187–90
rules on, 181, 183–85
discrimination, 21, 139–45
executive liabilities and, 135, 137n, 139–40, 142–43, 215
401(k)s and, 5–6, 139, 141–45, 207–8, 214
against lower-paid employees, 6, 140–45, 207–8
Dolan, Jack, 124
Dow Chemical, 123
D’Souza, Julia, 57
DuPont, 10–11, 15–16

early-retirement subsidies, 89
lump-sum payouts and, 49–51
pension assets for, 13–14, 18n, 20, 27
pension cutting and, 37, 41–42, 44
retiree health plans and, 168–69
Edison Brothers Stores, 24
Eggleston, Robert, 75
Ehmer, Walt, 96–97
Ell, Douglas, 185, 188–89
Emley, Ruth, 86–87
Employee Retirement Income Security Act (ERISA), 169–70, 183–91, 194
disability benefits and, 181, 183–85, 188
pension assets and, 10–12, 20, 189, 205, 214
pension disclosure rules and, 51–52
punitive damages and, 186, 189–90
retiree health plans and, 162–63, 167, 169, 184
employee stock ownership plans (ESOPs), 6, 208–9
Enron, 25, 63–64, 137–38, 209
executive liabilities, 4–6, 203, 214–15
COLI and, 116–19, 122, 133
discrimination issue and, 135, 137n, 139–40, 142–43, 215
financing of, 130, 134–40, 143
health benefits and, 99, 112, 114
risks in, 137–38
shadow plans for, 115, 215
valuation of, 112–14
executives, 46, 171, 216
bonuses of, 96–98, 105, 106–7, 111, 113, 207
COLI on, 126–27, 133
compensation of, 1, 4–6, 14, 19–23, 28, 33, 42, 56–57, 96–119, 122, 126, 130–40, 143, 180–81, 203, 205–6, 208, 210–15
dissolving retiree benefits and, 148–53
employee pension cutting and, 29, 31, 33, 41–42
401(k)s and, 6, 143, 208, 214
health benefits and, 66, 68–69, 99–100, 112, 114, 181
pension assets and, 10–11, 19–23, 27, 134–35, 138
pension income and, 56–57, 60–61, 63, 115
pensions of, see supplemental executive retirement plans
ExxonMobil, 107

Falk, William, 77
Fannie Mae, 112, 124
Fidelity Investments Institutional Operations Co., 85–87
Financial Accounting Standards Board (FASB), 140
FAS 87 and, 55
FAS 106 and, 65–68, 70, 72–73, 151–52
on retiree health plans, 66, 68, 70, 72–73, 151–52
Finlay, Dave, 44–46
Fletcher, Mary, 51
Florida Power & Light, 16
Ford, Scott, 109
Ford Motor Co., 15, 64n, 208
Foundation Coal Corp., 86
401(k) plans, 23, 24–25, 75, 112, 114, 206–14
cash-balance and, 34–36
cutting employer contributions to, 212–13
deferred-compensation and, 101, 110–11, 208
discrimination issues and, 5–6, 139, 141–45, 207–8, 214
ESOPs and, 6, 208–9
executives and, 6, 143, 208, 214
inadequacies of, 5, 206–7
investments in, 204, 206–11
pension cutting and, 46, 48
risks of, 204, 210–11
Fox News, 196, 200, 216
Freeborn, Justin, 83–84
Frias, Gonzalo, 171
Fruehauf Trailer Corp., 19

Galloway, John Wesley, 146–47, 155, 157
Gebhardtsbauer, Ron, 11
Gemunder, Joel, 108
GenCorp, 160–67, 171–72
General Electric (GE), 1–3, 24, 58, 66
excess pension assets of, 3, 9, 16–18
executive compensation at, 101, 111
lawsuit of, 17–18
General Motors (GM), 14–15, 50
executive compensation at, 103–4, 106
lawsuits of, 168–70
pension income of, 63, 64n
retiree health benefits at, 168–69
Gerstner, Louis V., Jr., 41–42, 46, 48
Goldman Sachs, 114
Goodyear Tire & Rubber, 108
Green, Gene, 129
Greene, William Britton, 22
Grogan, Donald, 137
Groom Law Group, 188–89
Gulotta, Michael J., 12, 20

Harrison, Michael J., 10–11
Hartford Life Insurance, 127, 132–33
Hartmarx, 138
Hayes Lemmerz, 157n
health plans, health plan benefits, 43, 53, 64n, 65–82, 96–101, 121, 214–15
accounting issues and, 65–70, 72–73, 76–78, 151–53, 196–97, 199–201
for active vs. retired employees, 75–76
black lung disease and, 177–81
COLI and, 124–25, 131, 215
costs of, 65–68, 70–78, 90–91, 148, 158, 168–69, 171, 196, 199, 202, 214
cutting of, 1, 3, 6, 15, 66, 68–72, 74–81, 92–93, 96, 100, 112, 118, 146–54, 156–61, 166–73, 175–76, 183, 196, 201–3
denial of, 177–78, 179, 181, 183, 184, 185
eligibility for, 72–73, 76–77, 80, 125, 156–58
executives and, 66, 68–69, 99–100, 112, 114, 181
financing of, 113, 160, 162–64, 171, 175–76
lawsuits and, 71–72, 92–93, 150–51, 153–57, 160–76
of Lucent, 89–93, 96–99
national overhaul of, 196–97, 199–201
pension assets and, 10, 15–17, 68, 71, 91, 97, 202, 214
premiums of, 69–70, 72–73, 76–77, 92, 125, 161, 170
pre-set spending caps on, 73, 75–78, 90, 202
retiree dropouts from, 74–75, 166, 202
retiree portfolio liabilities and, 81–82, 88–94, 96–97, 146–47
rules on, 65–70, 72–73, 78, 146–47, 151–52, 167, 169, 172, 178, 181
valuations of, 66–67, 70–71
Hewitt Associates, 82–83, 193, 195
Honeywell, 212
Huckabee, Mike, 196
Hughes Aircraft, 81–84
Hughes Aircraft Co. v. Jacobson, 18n
Hugo Boss, 141–42
Hurwitz, Charles, 23

IBM, 9, 66, 103
backlash at, 45–47
lump-sum payouts of, 48–49, 51
pension cutting at, 1, 39–41, 43–49, 51, 55
pension income of, 55, 58, 60
retiree health plan of, 1, 73, 75–77
Immelt, Jeffrey, 1–2
individual retirement accounts (IRAs), 35, 48, 117, 135n
Intel, 21, 134–36
Internal Revenue Service (IRS), 19, 21, 39, 47, 52, 85, 139, 142, 146, 207
COLI and, 123, 125, 132
International Paper, 76, 213
investments, investment returns, investors, 75, 82, 101, 202, 214
COLI and, 117–18, 127n, 133
executives and, 111, 113, 211, 215
in 401(k)s, 204, 206–11
pension assets and, 57–61, 63, 135, 203–4, 209
pension income and, 57–61, 63, 98, 118

Jelly, Bill, 80, 94–95
Johnson, Daniel, 116, 119–20
JPMorgan Chase, 112, 131
Justice Department, U.S., 17, 180

Kallett, Peter J., 136
Keegan, Robert, 108
Kelsey-Hayes, 146–48, 153–55, 158
Kies, Ken, 123–24, 130
Klein, James, 201
Kmart, 24, 74, 140–41
Kra, Ethan, 67
Kramer, Mabel, 162
KSOPs, 208–9, 212
Kwasha Lipton, 33–34, 37, 48

Labor Department, U.S., 9–10, 39, 74, 177, 188
Langlie, Steven, 38–39
life expectancies, 54, 62, 126
lump-sum payouts and, 49–50, 202
life insurance, 5, 53, 56, 114, 184
see also corporate-owned life insurance
Lincoln National Corp., 110
lobbying, 5, 10, 96, 198, 208
COLI and, 117, 124, 129–30, 132
pension assets and, 16, 28
pension disclosure and, 51–52
pension funding and, 61, 206
Lockheed Martin, 59, 61
Lockheed v. Spink, 18n
Loewy, Fred, 191–95
Lofgren, Eric, 36–37
Logue, Ronald, 110
Lopez, Noemi, 192, 193, 195
Lucent Technologies, 46, 63–64, 80, 88–100, 202
death benefits and, 88, 92–97
executive compensation at, 95–99
pension assets and, 10–11, 89, 91, 97–98
retiree health plan of, 89–93, 96–99
retiree portfolio of, 81, 88–98, 147
lump-sum payouts:
disclosure rules on, 51–52
employer benefits from, 49–51, 202
executive compensation and, 19, 23, 105, 108, 110, 143
in pension cutting, 48–51
Lynch, Mark, 33

McClendon, Aubrey K., 110
McClow, Roger, 155–59
McConnell, Patricia, 58
McDonnell, John, 68
McDonnell Douglas, 65, 67–70, 76, 147
McGrath, Joseph, 102–3
McKesson Corp., 114–15, 208
Madison, Chester, 137–38
Marine Engineers’ Beneficial Association, 50
Martin, Susan, 194
Massey Energy, 179–80, 181, 211
Massey Ferguson, 147–48, 151, 154–56
Medicare, 72–73, 113, 156–57
health care reform and, 196–97
premiums of, 92, 151, 161
prescription drugs coverage of, 96, 197–99
retiree health plans and, 15, 65, 69, 73, 90, 96, 161, 171, 202
Medicare Advantage plans, 156–57
Mercantile Stores, 25, 104–5
Mercer, 11–12, 18–19, 67
pension cutting and, 31–32, 36–38, 42–43
MetLife Inc., 133
Meyn, Gerald, 31
Mitchell, Stephen, 26
Montgomery Ward, 24–25
Motorola Inc., 191–95
Mulva, Jim, 106

Nathenson, Eugene, 76
National Association of Insurance Commissioners, 131
National Convenience Stores (NCS), 128
National Football League (NFL), 181–90
New England ElectricSystem, 71
New York Times Co., 126
Nordstrom, 102
Northrop Grumman Corp., 10, 58, 59
Northwest Airlines, 64n

Obama, Barack, 196, 198, 200
Occidental Petroleum, 23, 25
Omnicare, 108–9
Omnicom, 109
Oneida Ltd., 136–37
O’Neil, Howard, 92

Pacific Gas & Electric (PG&E), 71, 107
Pacific Lumber, 23
Pacific State Bancorp, 119
Palumbo, Frank, 161–62, 165
Parano, Joseph, 93
Patient Protection and Affordable Care Act (2010), 178–79
Payne, William, 163, 166
Peksa, Ed, 160, 163–64
Pension Benefit Guaranty Corp. (PBGC), 14–15, 26–27, 62, 83, 137–38, 204
pension equity plans (PEPs), 40–45, 47
pension plan assets, 9–28
benefit cutting and, 30, 33, 35
excesses of, 3, 9–24, 27, 33, 58, 62, 76, 89, 91, 97, 104–5, 115, 204–5, 208, 214–16
executives and, 10–11, 19–23, 27, 134–35, 138
health plans and, 10, 15–17, 68, 71, 91, 97, 202, 214
lawsuits on, 17–18, 19n, 26
retiree portfolios and, 81–82, 86, 88
returns on, 9, 59–61, 63, 71, 115, 135, 203–4
selling of, 16–20, 22
uses of, 2–3, 5, 9, 11–21, 23–28, 30, 33, 45, 89, 91, 97, 118, 189, 202–4, 209, 213–14, 216
pension plan income, 54–64, 82, 102
executives and, 56–57, 60–61, 63, 115
and expected rates of return, 59–61, 63
impact of contribution amounts on, 61, 63
investments and, 57–60, 63, 98, 118
mergers and acquisitions in, 61–62
pension cutting and, 55–58, 62–63, 64n
pension plans, pension plan benefits:
calculation of, 33–37, 39–41, 44–46, 81–84, 105–9, 191–95
cutting of, 1, 3–5, 14, 20, 24, 27, 28, 55–58, 62–63, 64n, 81, 89, 91, 100, 104–5, 107, 112, 204, 213
deficits of, 14, 16–17
denial of, 181, 185–86
eligibility for, 104, 140–45, 184
employee backlash on, 45–47
errors in, 81–88, 191–95
freezing of, 14–16, 19, 30–31, 33–37, 40, 43, 52, 53, 56–57, 98, 100, 103–4, 108–10, 114–15, 136–37, 203–4, 215
funding of, 61, 63, 205–6
lawsuits on, 52, 167, 194–95
lies and deceptions on, 44–46, 52–53
reporting on, 51–53, 55, 108–10
rules on, 3–5, 9–10, 13, 19, 21, 27, 28, 30, 32, 36, 41–42, 50n, 51–53, 55–59, 64–66, 82–83, 92, 107, 135, 139–40, 144–45, 147, 162–63, 167, 169–70, 178, 181, 184, 189–90, 191–92, 194–95, 205–7, 214–15
security of, 11–12, 14
termination of, 1–2, 9, 12, 23–28, 105, 115, 137, 204–5, 208, 215–16
underfunding of, 6, 14–16, 23, 102, 115, 136, 138, 206, 215
volatility of, 203–4
Pension Protection Act, 50n, 52, 145, 207
People’s Energy Corp., 22, 58–59
Perelman, Ronald, 23
Petertil, Jeffrey, 70–71
Pittman, Paul, 148–51, 154
Polster, Dan, 165–66
Porter, Ken, 11
Post, Glen, 21
prescription drug benefits, 56, 65–66, 74–75, 125, 160–61
cutting of, 98, 156–57, 171–72, 197–99
employer subsidies for, 96, 197–202
of Medicare, 96, 197–99
retiree health plans and, 65, 69, 75, 96
PricewaterhouseCoopers (PwC), 47–48, 142n, 143
Procter & Gamble Co., 120, 125, 208
Prudential, 16, 22, 133
public pension plans, 5, 105–7, 203, 213–14

Raytheon, 81–84
reservation-of-rights clauses, 168–70
restructurings, 42, 56, 67, 80–81, 89–90, 100, 196, 214
health plans and, 71, 90, 146
pension assets for, 3, 13–14, 17, 19, 30
retiree portfolios, 81–98
health care liabilities of, 81–82, 88–94, 96, 146–47
pension liabilities of, 81–82, 85, 87–89, 92, 94, 97
Retirement Systems of Alabama, 25–26
Revlon, 23
Rexam, 172–73
Reynolds, Margaret, 122
Rice, Victor A., 147–48, 151–53
RJR Nabisco, 41–42
Rossman, Liz, 74–75
Royal & Sun Alliance Co., 19, 143
R.R. Donnelley, 65, 70, 73, 120
Russell, Elaine, 74
Russo, Patricia, 96, 97–98

St. Joe Co., 22
Sanders, Bernie, 47
Sauvigne, Donald, 41
Schacht, Henry, 91–92, 96, 99
Schiltz, Patrick, 173
Scott, H. Lee, Jr., 210
Sears, 65, 73–75, 208
Securities and Exchange Commission (SEC), 64n, 201, 206
executive compensation and, 100, 102, 109, 132–33
Seidenberg, Ivan, 14
severance payments, 108, 154
of Lucent, 91, 98
pension assets for, 3, 13, 15, 20
Shadur, Milton, 174
Shaklee, Albert, 72
Sharpe, George, 94
Siegel, David, 25
Singerman, Frederic, 192–93
Smit, Gerald, 36
Smith, William, 128
Social Security, 7, 22, 27, 70, 84, 94, 141, 143, 158, 162, 189
COLI and, 121, 127
taxes and, 13, 105, 113–14
Sprague v. General Motors, 168–70
State Street Corp., 110, 213
Stember, John, 163, 166
Stillwagoner, Peggy, 129
stock market:
crises in, 1, 14–15, 27, 63–64, 112, 204, 207, 210–11, 215
pension assets and, 9, 12, 14–16, 27, 91
stocks, stock options, 6, 78, 152, 214
executive compensation and, 56, 96, 97, 100, 108, 110–14, 212–13
in 401(k)s, 5, 206–10
investing pension assets in, 203–4, 209
pension income and, 58–60, 63
Strella, Paul, 32
supplemental executive retirement plans (SERPs), 4–6, 99–115, 131, 136–39, 180, 206, 210, 216
calculation of, 105–9
financing of, 136, 137n, 138–39
at Lucent, 95–97
public pensions and, 105–7
qualified (QSERPs), 136–38, 215
regular workers’ pensions and, 2, 5, 14, 19–23, 104–5, 108–10, 118
reporting on, 108–10, 112
risks of, 137–38
rules on, 139, 178
Supreme Court, U.S., 18n, 52–53, 125, 147n, 173
ERISA and, 184
on Varity case, 154–56

taxes, 48, 158, 171, 216
COLI and, 117–19, 122–27, 131, 133
disability benefits and, 188, 190
discrimination issues and, 139, 142, 144
executives and, 100–102, 105, 108, 111–14, 118, 135
401(k)s and, 207–9, 213
health care and, 68, 113, 199–201
pension assets and, 13, 16, 23–25, 33, 205
pension funding and, 61, 205–6
and subsidies for prescription drug benefits, 96, 197–202
Taylor, Bill, 31
Taylor, Rhada, 69–70
Tibbs, Don, 27
Tillman, Felipe M., 121–22
Torrie, William, 47
Towers Perrin, 105, 127, 155
pension cutting and, 37–38
on retiree health plans, 77, 152
Towers Watson, 105, 107, 200
TRW, 146–47, 154, 156–58

unions, 45, 61, 92, 142, 161–62, 169–76, 187, 197
dissolving retiree benefits and, 148–52
excess pension assets and, 10–11, 19, 27
lawsuits against retired members of, 173–75
retiree health plans and, 65, 69, 77, 96, 162, 170–76, 202, 215
Unisys, 65, 72, 102–3
United Airlines, 14, 27
United Auto Workers, 149–52
United Parcel Service (UPS), 212
United Steelworkers of America, 171–73, 176
Upper Big Branch Mine disaster, 180
US Airways, 25–26
USX-U.S. Steel Group, 16, 58–59

Van Dyke, John, 161, 163–64
Varity Corporation:
dissolving retiree benefits and, 148–54, 160–61, 166–67, 170
lawsuits and, 150–51, 153–56, 166
Project Sunshine of, 151
Verizon Communications, 109, 208
excess pension plan assets of, 3, 9, 13–14
health care and, 1, 196, 200
Vine, John, 10

Wachovia Corp., 131
Waldron, Denis, 26–27
Walker, Lorenzo, 141
Wall Street Journal, The, 48, 67, 70, 200–201
Wal-Mart, 24, 123, 144–45, 160, 210
Washington, Victor, 181–83, 185, 187–90
Watson Wyatt Worldwide, 11–12, 32, 37–38, 42–43, 105, 136
on lump-sum payouts, 48–49
Waxman, Henry, 200–201
Webster, Mike, 186–87
Wellman, Jill, 148–49, 154
Wells Fargo, 109, 131
Western Electric, 80, 94–95
Lucent and, 88, 92, 147
Whirlpool, 78–79
Williams, Delvin, 190
Winn-Dixie Stores, 117, 125
workers’ compensation, 177–81
Wotus, Stanley, 163–64

Xerox, 29, 75–76

Yarter, Chuck, 170–71

Zellers, Mark, 15