A Book All Pensioners Should Read: The Retirement Heist

  • Retirement Heist

A Book Review of The Retirement Heist

Why Pensions Matter To Me

Pensions are a part of my life.  As a Certified Divorce Financial Analyst®, I am conduct pension valuations for my clients and their attorneys.  Because pensions don’t display a cash value on the statement, they need to know how much the pension is currently worth.  That is where I come in. I crunch the numbers so that they have a current pension value to use for property settlement negotiations.

My opinion of pensions prior to reading this book was that they were confusing, non-transparent, and unpredictable.  I became more suspicious of pensions after watching the movie, Going In Style, which is based on the story of three pensioners who lose their retirement income when the pension plan goes belly-up (Braff, 2017).  The retirees feel betrayed. They are in serious financial trouble because they lost their means of economic survival. While I know this is a fictional movie, the premise of the story (the pension plan folding) is based upon real-life events.  Pension plans really do go belly-up.

Shady Pension Plans

Retirement Heist presented an entire new set of concerns to me regarding pensions (Schultz, 2012). Packed with facts, Schultz makes a compelling case how pension plans are not to be trusted (2012).

Clearly, Schulz doesn’t trust pension plans, in general.  However, are there any good pension plans?  I met the Director of the South Dakota Retirement System last year, which is the pension plan for state employees in South Dakota.  He boasted that their pension plan was one of the few in the nation that is solvent. After reading Retirement Heist, I am skeptical of even the most solvent of pension plans.   There are accounting-loopholes that can go undetected, and most pensioners would never be the wiser.

There are different techniques corporations use to manipulate pension plans to benefit executives at the cost of employees.  The author tells story after story of the rich robbing from the poor. It evokes an image of the few elite executives running away into the night with all the worker bees’ money bags.

The techniques used to accomplish this lie in the ability of the executives or board members to silently change the structure of pension plans without the employees being aware of what is going on (Schultz, 2012).  They must disclose changes, but they have the ability to title it in opaque terms that employees don’t understand (Schultz, 2012).

In 1997, for example, CIGNA camouflaged major changes to their pension plan. Obviously, the changes were not favorable for the employees.  The executive team presented it in a way that duped employees into quiet acceptance of the changes (Schultz, 2012, p. 31). The newsletter announcing the change included a message from the CEO stating “I am pleased to announce that on January 1, 1998, CIGNA will significantly enhance its retirement program…These enhancements will make our retirement program highly competitive” ( (Schultz, 2012, p. 31).  Little did the employees know that their pensions were being frozen (Schultz, 2012, p. 31).

What To Do About It?

For people concerned about the longevity of their pension plan, what is their alternative?  Because pension plans remove all control from the employee, they need to look elsewhere for a back-up plan.  Anybody who has a pension plan, I’d recommend they read this book. Ask a lot of questions about the plan and expected benefits.  Don’t give up when the company tries to squash your inquiries. When working with my divorce clients, I would advise finding alternative assets (besides the pension) to take.

Company-Owned Life Insurance Policies

Schultz’s exposure of company-owned life insurance jolted me out of my seat in surprise.  Banks, in particular, are avid users of this strategy (Schultz, 2012). She sites an estimate that banks will receive more than $400 billion in death benefits in the coming decades (Schultz, 2012, p. 119).  I am an avid supporter of Capitalism. If the banks can legally profit from this measure, and it’s done in an ethical way, I consider it to be an acceptable business practice.

What is not acceptable, is not properly educating the employee about the procedure.  Do they understand the implications of signing a company-owned life insurance policy with them as the insured, and the company as the beneficiary?

The author claims that “most families have no clue that their relatives are covered” (Schultz, 2012, p. 119).  The example is given of William Smith, a 21-year-old convenience store worker, who was murdered at work (Schultz, 2012, p. 128).  His wife received $60,000 from life insurance proceeds that the company provided, in exchange for $250,000 of the death benefits proceeds that was paid to the company (Schultz, 2012, p. 128).  I assume people like William Smith agree to sign a deal like this because of the “free” benefits it offers him. At the time of signing the policy, he doesn’t pay much attention to the fact that majority of the death benefit proceeds will go to the employer, rather than his wife. Who wouldn’t want to accept free benefits from their employer?  It’s not until the day of reckoning comes that the ethics of the agreement is questioned.

Clearly, Schultz is not a fan of company-owned life insurance.  While I appreciate being alerted to this practice, I’d like to understand the education and disclosure statements for the insured employees prior to taking a firm stance on the issue.

This Message Needs To Be Heard

This book has a prominent publisher (Penguin Group) and has won awards (the 2012 Helen Bernstien Book Award for Excellence in Journalism).  Sadly though, its audience is narrow. Schulz’s writing style is overbearing with facts (2012). It’s not an “easy read.” While Schultz accomplishes her goal of exposing the ugly truth of what is going on behind the scenes in pension plans, it is disappointing that the book isn’t going to reach the wide audience that it deserves.  The average reader wouldn’t make it past the first chapter. I’d like to see a second version of this book published with the target audience of the average pensioner. Everyone who has a pension should read it.


Braff, Z. (Director). (2017). Going In Style [Motion Picture].

Schultz, E. E. (2012). Retirement Heist. New York: Penguin Group.