Skip to main content

Rest in peace, Bob! We will miss you around here! - CEO
Yesterday in the Times Dealbook, an interesting profit stream, pushed by Wall Street, involves a new kind of benefit plan: when you die, the boss gets the insurance money. Shocked?
The owner of the newspaper, Freedom Communications, was writing to request workers’ consent to take out life insurance policies on them.

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.

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 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.”

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.

Yeah...I forgot to mention that all of this is tax free. Tax free!!!
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.

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.

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:
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?

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site