11
An executive’s ability to delay paying payroll taxes on compensation is in itself an economic benefit that ultimately boosts executive paychecks. And at some companies, they don’t pay payroll taxes at all: The companies reimburse them for their FICA payments.
12
Of course, Aon also provided group and executive policies benefiting the victims’ families, which it purchased from other insurers. To be clear, Aon and other companies aren’t celebrating when they receive death benefits; they’re taking out the policies to benefit from the ability to shelter investments in them from taxes, and for the accounting benefits.
13
When companies move deferred-compensation obligations into pension plans, taxpayers not only end up subsidizing additional tax breaks on executive pay, but they also eventually end up on the hook in another way: When deferred executive salaries and bonuses are part of a pension plan, they can be rolled over into an IRA— another taxadvantaged vehicle.
14
To help the plan pass the discrimination tests, the company added a minimum benefit of $400 to $500 a year for eligible retirees. “The Company’s pension plan passes the test by a wide enough margin to permit the transfer of most of the supplemental retirement benefits to the Pension Plan,” noted an internal company memo.
15
Eli Gottesdiener, referring to the PricewaterhouseCooper’s plan in court documents.
16
Convicted in 2007, Black was freed on bail in 2010 while part of his case was on appeal. In June 2011, a federal judge ordered him back to prison for thirteen months.
17
Less fortunate were the retirees who ended up at auto-parts maker Hayes Lemmerz. To dump the retirees, the company initially explored the idea of suing them in court and asking a judge to agree that an earlier settlement McClow had negotiated, in which the company had agreed to provide a certain level of lifetime coverage, was ambiguous. The company filed for Chapter 11 in 2009 and shed most of its retiree obligation. When it emerged from bankruptcy, it was obliged to pay only $1,000 a year per post-sixty-five retiree.
18
The football disability benefit increased to $5,585 in December 1994, $6,835 in April 1997, and $7,667 in April 2000.
19
Employees of religious organizations are also exempt from ERISA.
20
Only about half of former pro players are eligible for coverage under the plan, because they had fewer than three credited seasons, which is the minimum required.
21
These are called “leveraged” ESOPs, to distinguish them from ESOPs used by owners of small, privately held companies to buy out the owners’ shares.
