62 The panelists put on a skit: “Consulting in Mergers & Acquisitions” panel, Conference on Consulting Actuaries, Colorado Springs, 1996.
63 Warren Buffett, chairman of Berkshire Hathaway: Warren E. Buffet, “Who Really Cooks the Books?” editorial,
CHAPTER 4 : HEALTH SCARE
65 “Health care costs continue to skyrocket”: John McDonnell, CEO, McDonnell Douglas, letter to retirees, October 7, 1992.
67 A sample from late 1991: “Automakers Face Massive Charges,” Associated Press, November 12, 1991; “Rude Awakening on Health Costs,”
67 “The Street views FAS 106 obligations”: Ethan Kra, then the chief retirement actuary at William M. Mercer, “Basics of Funding Retiree Medical,” Proceedings of the Conference of Consulting Actuaries, 1996.
68 McDonnell Douglas’s pump-and-dump maneuver: Company filings; Ellen E. Schultz, “This Won’t Hurt: Companies Transform Retiree-Medical Plans into Source of Profits,”
69 “they created a piggy bank of earnings improvers”: Jack Ciesielski, “Why SFAS Is Not a Dead Issue,” Vol. 3, No. 3,
70 R.R. Donnelley, a printing company based in Chicago: Ibid.
71 his largest client, a Big Six accounting firm, fired him: Jeffrey Petertil, “Ignore the Retiree Health Benefits Rule,”
71 Defense contractors and public utilities had an additional incentive: Schultz, “This Won’t Hurt.”
72 Shaklee had to take a minimum-wage midnight-shift job: Author interview.
72 “Just as in war, there are no winners”: Unisys Corp. Retiree Medicare Benefits Erisa Litigation, No. MDL 969, U.S. District Court, E.D., Penn., Aug. 13, 1996.
74 Liz Rossman, Sears’s vice president for benefits: Author interview.
75 Robert Eggleston, an IBM retiree in Lake Dallas: Author interview.
75 Xerox split its active and retired employees into two pools: Company confirmed.
76 Eugene Nathenson, a retired controller: Author interview.
77 William Falk, who oversaw the retiree medical consulting practice: Conference of Consulting Actuaries, October 1998.
77 Companies could also adopt “more aggressive assumptions”: Enrolled Actuaries meeting, Washington, D.C., March 1998.
78 The flexibility built into the accounting rules: For a detailed examination, see Julia D’Souza et al., “Accounting Flexibility and Income Management: The Case of OPEB Recognition,” Johnson School of Management, Cornell University, 1999.
CHAPTER 5 : PORTFOLIO MANAGEMENT
80 “I guess I’m going to have to die before then”: Author interview with Margaret Jelly.
81 Ackerman had flown corporate jets: Author interview.
83 Justin Freeborn, a legal-aid lawyer: Author interview.
84 found a note from the retired executive, with a personal: Author interview with Audrey Ackerman.
85 Fidelity… concluded that 316 retirees had mistakenly been paid: Author interview with BP official.
85 Craven, a widower with macular degeneration: Author interview.
91 Schacht made a presentation to a group: Interviews with Lucent retirees, Henry Schacht.
92 Howard O’Neil, who was ninety at the time: Author interview.
93 Parano… sued Lucent in small claims court: Author interview with Joseph Parano, California;
94 Connie Sharpe, a widow in Las Cruces, New Mexico: Author interview.
96 Walt Ehmer… chief executive of Lucent Technologies Denmark: Author interview.
97 Schacht later defended the bonuses: Author interview.
CHAPTER 6 : WEALTH TRANSFER
104 GM has often claimed that its U.S. pension plans: Ellen E. Schultz and Theo Francis, “Hidden Burden: As Workers’ Pensions Wither, Those for Executives Flourish—Companies Run Up Big IOUs,”
104 board of directors of Mercantile Stores met: Transcripts of Mercantile board meetings.
108 total retirement payout was more than $130 million: estimate of total by Theo Francis, Footnoted.org.
113 executives were receiving more than one-third of all pay: This and other details in this section are based on the author’s calculations and analysis, which were confirmed by Stephen Goss, chief actuary of the Social Security Administration.
114 “The most important contributor to higher profit margins over the past five years”: Steven Greenhouse and David Leonhardt, “Real Wages Fail to Match a Rise in Productivity,”
CHAPTER 7: DEATH BENEFITS
116 Just before Christmas 2008, Irma Johnson:
117 “dead peasants insurance”: The memos were exhibits in a lawsuit in which the United States Court of Appeals for the Eleventh Circuit held that Winn-Dixie’s COLI policies were a sham transaction for federal income tax purposes.
121 “Without these suicides, NCC would be running at 33%”: Exhibits provided by Mike Myers, of McClanahan, Myers, and Espey, a Houston law firm that has handled numerous COLI cases.
121 To keep track of when employees and retirees die: Ellen E. Schultz and Theo
