April 7, 2006
AFL-CIO Now Tracking
CEO Pension Scams
As major companies are replacing their workers' traditional defined benefit pension plans with "more risky" defined contribution plans, the chief executive officers of these companies are getting "golden pensions," known as "supplemental executive retirement plans (SERPs). Now, to highlight this outrageous double standard, the AFL-CIO’s annual Executive PayWatch Web site (www.paywatch.org) now includes the top 25 pension packages for CEOs for 2005.
According to AFL-CIO Secretary-Treasurer Richard L. Trumka, "These excessive CEO pensions are taking money out of the pockets of shareholders, including the retirement savings of America's working families. From what we see corporate America doing for its CEOs, we know they can afford to do right by their employees."
According to the Bureau of Labor Statistics, only 21 percent of private sector workers are covered by traditional defined benefit plans; compared to 69 percent of Fortune 1000 chief executive officers who have these supplemental executive retirement plans.
One sad aspect of these SERPs, is that many of these "huge" pension plans that are not tied to how well the CEO performs. For example, IBM has slashed pensions for IBM workers twice under CEO Samuel J. Palmisano's leadership--but each time the CEO was "grandfathered" out of the changes. He will take home about $75,000 a week in retirement, while future IBM workers will have no defined benefit pension.
