America’s Corporations are Stealing Billions From their Workers

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( — August 28, 2016) — New figures from Central Bank reveal that the S&P 500’s largest corporate pension funds are alegedly “stealing” a staggering $376 billion (and counting) from their workers, such as Jack Welch, former General Electric boss, who has asked GE’s board to eliminate “everything except the traditional office and administrative support given for decades to all retired GE chairmen and vice chairmen.”

Welch compiled a table that shows that top companies, such as General Electric, General Motors and Boeing, lead in underfunding almost 700,000 current employees. It is partly because they have to pay for the exorbitant retirement plans of their executives.

“Pension under-funding continues to be a major issue for S&P 500 constituents,” said Citigroup’s Chief US Equity Strategist Tobias Levkovich. He added that “market gains over the last seven years have not substantially alleviated pension pressures.”

The underfunding accelerated when great recession precipitated a general market decline. Since then, underfunding of pensions has balooned to an estimated $376bn last year.

According City Group the oil crash and not corporate greed is to blame for 22% increase in the pension funding shortfall when compared with 2008.

Reportedly, only 30 companies in the S&P 500 were fully funded as of year-end 2015. The report shows almost half of the overfunded companies coming from the financial sector.

Nathan Faber, vice president of investment strategies at Newfound Research, wrote in Wall Street Journal that the move is like collecting pennies in front of a steamroller.

 “There comes a point where you might be picking up pennies in front of a steamroller,” Nathan Faber warned in the WSJ. However, if pension underfunding continues in the same alarming direction, funds will need to be found eventually, whether through bailout or massive benefit cuts, both likely to be at the cost of the taxpayer.