At a time when scores of companies are freezing pensions for their workers, some are quietly converting their pension plans into resources to finance their executives' retirement benefits and pay.Companies Tap Pension Plans to Fund Executive Benefits (WSJ, 4 August 2008)
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.
When the going gets weird, the weird turn pro. - Hunter S. Thompson
04 August 2008
A warm, personal gesture from senior executives to themselves
When even the Wall Street Journal is delicately holding its nose while describing how your company is funding its executive pension scheme, you know trouble's on the way: