New federal disclosure requirements have revealed that some companies have been inflating the value of pension plans for top executives, the Wall Street Journal is reporting.
Top executives can opt for lump-sum payments of their pensions, which usually are paid out in installments over a former worker’s retirement. Doing that allows them to increase the value of their pensions by 10% to 40%, while ordinary workers with 401(k) plans watch their retirement savings fall with the economy.
“It’s a sneaky way to give executives larger pay,” a Senate pension expert says.
“Sneaky way” may be too strong a term. “Bailout” fits nicely, though.
It is not easy being a top executive these days. Everybody’s watching how much money you make so closely that you can’t make an honest buck anymore.
Don’t worry. Those executives will put all that extra money to good use. They’ll stimulate the economy. Hooray for the rest of us!