The owner of the newspaper, Freedom Communications, was writing to request workers’ consent to take out life insurance policies on them.There used to be a time when a pension was paid for put of the profits of the business, generated by the actual work of the employees. Now, at least in this case, its the death of your co-workers thats paying for your pension, thats IF you even get a pension. But thats just this one employer. There are many more who dont use these death profits for pensions, but for paying executive salaries or anything else they want to use the money for:
But the beneficiary of each policy would not be the survivors or estate of the insured employee, but the Freedom Communications pension plan. Reporters and editors resisted, uncomfortable with the notion that the company might profit from their deaths.
After an intensive lobbying campaign by Freedom Communications management, a modified plan was ultimately put in place. Yet Register employees were left shaken.
But in many cases, companies and banks can use the tax-free gains for whatever they choose. “If you want to take that money and go build a new bank branch, fine,” said Joseph E. Yesutis, a partner at the law firm Alston & Bird who specializes in banking regulation. “Companies don’t promise regulators they will use it for any specific purpose.”Yeah...I forgot to mention that all of this is tax free. Tax free!!!
Hundreds of billions of dollars of such policies are in place, providing companies with a steady stream of income as current and former employees die, even decades after they have retired or left the company.
But absent meaningful regulation around the practice, it grew unchecked, and soon companies were taking out policies on many poorly paid employees like janitors, then reaping millions in profit when they died.Dead peasant insurance sounds pretty accurate to me. But what really sets me off is the executives and bankers line that they are doing you a favor by recouping the cost of your employment with your death. Indeed, by one percenter logic, you should be grateful:
A string of class-action lawsuits, some filed by Mr. Myers, went after companies abusing the practice. Several companies, including Walmart, settled the suits, paying millions to low-ranking employees who had been covered. The I.R.S. took companies including Winn-Dixie and Camelot Music to court for using policies as tax avoidance schemes.
Critics began calling the policies “dead peasant” insurance, an allusion to Nikolai Gogol’s novel “Dead Souls,” in which a con man buys up dead serfs to use them as collateral in a business deal.
Responding to attacks on the Freedom Communications plan, Mr. Kushner defended himself in a letter to employees. “Life insurance is not ghoulish, nor are the people who sell it, nor are those who buy it,” he wrote. “Life insurance, by its very nature, was created to benefit the people we love and care about most.”The people Wall Street and corporate executives care most about. Guess who that is?