Retirement Heist: how companies plunder and profit from the nest eggs of American workers

23 Ronald Perelman, who took over Revlon: Ellen E. Schultz, “Pension Terminations: 80s Replay,” The Wall Street Journal, June 15, 1999.

23 Congress slapped a 50 percent excise tax: Omnibus Budget Reconciliation Act of 1990.

25 “the future of the airline is at stake”: Ellen E. Schultz, Theo Francis, and Susan Carey, “Two Airlines Press Workers for Deeper Cost Cuts—US Airways’ Termination of Pilots’ Pensions Could Set Example for Industry,” The Wall Street Journal, March 18, 2003. Quote reported by Susan Carey.

25 Few challenged the “terminate or liquidate” statement: Ellen E. Schultz and Theo Francis, “Most Workers Are in Dark on Health of Their Pensions—US Airways Killed a Plan That Pilots Had No Inkling Was in Financial Danger,” The Wall Street Journal, July 1, 2003.

26 Without the information, the pilots: Author interview with James Kenney, the pilots’ actuary. See also U.S. Airways Group, Inc., United States Bankruptcy Court, Eastern District of Va., Alexandria Div., Case No. 02-83984-SSM, Ch. 11.

26 Denis Waldron, a retired pilot in Waleska, Georgia: “Hardship Testimonies.”

27 The maximum in 2011: $54,000: Pension Benefit Guaranty Corp., Maximum Monthly Guarantee Tables.

27 Don Tibbs, of Gainesville, Georgia: “Hardship Testimonies.”

CHAPTER 2 : HEIST

29 In 1997, Cigna executives held a number of meetings: Amara v. Cigna, Defendants’ Response to Plaintiff’s Proposed Findings of Fact, No. 3:01-CV-2361 (MRK) (District of Connecticut, 2006).

31 In September 1997, consulting firm Mercer signed: Amara v. Cigna.

31 “We’ve been able to avoid bad press”: Exhibits, Amara v. Cigna.

32 The law “doesn’t require you to say”: “Introduction to Cash Balance/Pension Equity plans,” Meeting of the Society of Actuaries, New York, 1998.

33 “Jan, you would be sick if you knew”: Amara v. Cigna.

34 “immediately reduce pension costs about 25 percent to 40 percent”: A Kwasha Lipton partner, benefits conference in 1984.

34 Bank of America was the first company to test-drive: Bank of America’s senior vice president of compensation and benefits, 1993 Conference Board meeting.

34 “One feature which might come in handy”: Robert S. Byrne, partner, Kwasha Lipton, letter to a client, 1989.

35 Amara’s opening balance was $91,124: Amara v. Cigna.

36 Gerald Smit, a longtime AT&T employee: Engers v. AT&T.

36 “masquerading as a defined contribution”: Eric Lofgren, “The Better Alternative Defined Benefit or Defined Contribution Plans,” Record of the Society of Actuaries, 1986, Vol. 12, No. 1.

38 Jim Bruggeman was forty-nine: Ellen E. Schultz and Elizabeth MacDonald, “Retirement Wrinkle: Employers Win Big with a Pension Shift; Employees Often Lose,” The Wall Street Journal,

December 4, 1998.

38 Steven Langlie had spent three decades: Ellen E. Schultz, “Problems with Pensions: What You Don’t Know About the Cash-Balance Retirement Plans Can Hurt You,” The Wall Street Journal, November 8, 1999.

39 the giant accounting firm, made a big miscalculation: Schultz and MacDonald, “Retirement Wrinkle.”

41 “The plan took me months to understand”: Donald Sauvigne, IBM’s head of retirement benefits, 1995 actuaries’ conference in Vancouver.

42 Watson Wyatt had been marketing its “pension equity plan”: “Workforce Management: Strategic Retirement Design,” Watson Wyatt Insider newsletter, October 1998.

42 “It is not until they are ready to retire”: Watson Wyatt actuary, “Introduction to Cash Balance/Pension Equity Plans,” Society of Actuaries, New York, October 1998.

42 “but they are really happy”: Meeting of the Society of Actuaries, October, 1998.

42 One service was the firm’s “Aging Diagnostic”: Watson Wyatt Insider newsletter , October 1998.