'Not a penny. That's why they accepted such strict regulations.
But it was very shortsighted. For most of them, the pension's worthless.'
'Stacked deck,' I said. 'Giving Jones an eight-figure cashboxthat's why he's making the staff's lives miserable. He doesn't want to destroy the hospital-he wants to keep it limping along with no doctor staying very long. Keep turnover high-staff leaving before five years or when they're young enough to get comparable jobs. The pension keeps accruing dividends, he doesn't have to payout, and he's able to rape the surplus.'
He nodded with passion. 'Gang rape, Doctor. It's happening all over the country. There are over nine hundred thousand corporate pension funds in the U.S. Two trillion dollars held in trust for eighty million workers. When this last bull market created billions of dollars of surplus, corporations got Congress to ease up on how surpluses can be used. The money's now considered a company asset, rather than the property of the workers. Last year alone, the sixty largest corporations in the U.S. had sixty billion dollars to play around with.
Some companies have started buying insurance policies so they can use the princpal. It's part of what fueled the whole takeover mania-pension status is one of the first things raiders look at when they choose their targets. They dissolve the company, use the surplus to buy the next company, and dissolve it. And so on and so on.
People get thrown out of jobs-too bad.'
'Getting rich with other people's money.'
'Without having to create any goods or services. Plus, once you start thinking you own something, it gets easier to bend the rule.
Illegal pension manipulations have skyrocketed-embezzlemen taking personal loans out of the fund, awarding management contracts to cronies and taking kickbacks while the cronies charge outrageous management fees- that's organized crime's contribution.
Up in Alaska we had a situation where the mob cleaned out a union fund and workers lost every cent. Companies have also changed the rules in the middle of the game by switching over to definedcontribution plans.
Instead of monthly payments the retiree gets one lump sum based on his life expectancy, and the company buys itself predictability. It's legal, for the time being, but it defeats the whole purpose of pensions-old-age security for working people. Your average blue-collar guy doesn't have any idea how to invest. Only five percent ever do.
Most defined-benefit payouts get frittered away on miscellaneous expenses, and the worker's left high and dry.'
'Surpluses,' I said. 'Bull markets. What happens when the economy slows, like right now?'
'If the company goes belly-up and the plan's been looted, the workers have to collect from any private insurance companies that hold paper.
There's also a federal fund-PBGC. Pension Benefits Guarantee Corporation. But just like FDIC and FSLIC, it's grossly underfunded.
If enough companies with looted plans start folding, you'll have a crisis that'll make the S and L thing look like a picnic.
But even with PBGC functioning, it can take years for a worker to collect on a claim. The employees with the most to lose are the oldest and sickest-the loyal ones who gave their lives to the company.
People go on welfare, waiting. Die.'
His whole face had gone red and his hands were big mottled fists.
'Is the doctors' fund in jeopardy?' I said.
'Not yet. As Mr. Cestare told you, Jones saw Black Monday coming and turned mega-profits. The hospital board of directors loves him.'
'Building up his cashbox, for future plundering?'
'No, he's plundering right now. As he's putting dollars in, he's slipping them out.'
'How can he get away with it?'
'He's the only one who's got a handle on each and every transaction-the total picture. He's also using the fund as leverage for personal purchases. Parking stock in it, merging fund accounts with his own-moving money
