How Top Execs Game Retirement Plans

Corporate executives and employee-benefits consultants have engineered a cascade of arcane methods to deprive ordinary retirees of benefits they thought they were promised, in order to fatten corporate profits and the benefit packages of top executives. That is the harsh message of Wall Street Journal reporter Ellen E. Schultz’s meticulously-researched book, Retirement Heist.

I will in due course tell you more about this book, but first I have a confession to make.

Several years ago, after a brief failed endeavor trying to help a small company in Spain with its artificial intelligence research, I decided the only thing to do next was to seclude myself in a remote location and write a book. I found a small town in a small country. I lived in a little apartment in that town and wrote for three or four hours each day for five months, using as my office the top of a turret in a distant corner of an ornate, sprawling estate with Gothic architecture that had been turned into a tourist attraction.

About a year later I saw my accountant about taxes. He said, “So, you spent five months last year living in a foreign country writing a book.”

I said yes, wondering what relevance that had.

He said, “So you were working in that foreign country.”

I said yes, if you call that working.

Then he said, “Did you record your expenses?”

I said heck no. Then he said, “Well then, we’ll have to use the per diem.”

It turned out that I could deduct my expenses at the government’s per diem rate listed for the nearest city. The haven I had settled upon was Portugal,  and the nearest city turned out to be Lisbon, where the per diem rate must have been for visiting dignitaries of the top rank, because it was easily four times what I spent every day while living in the nearby town of Sintra – and that includes all the wine I drank.

Thanking my astute accountant, I did a “happy dance” (as Ellen Schultz would put it) to revel in the tax relief windfall he had found for me.

I did not think about the millions of people who do not have so expert an accountant, who did not spend five months in a small town in a small country drinking wine and writing, and who pay more in taxes to make up for what I didn’t. In fact, if one of those people had shown up at my door complaining of how much more he would have to pay because of me (about a penny, when you come down to it), I would have thought he was a nutcase and avoided him like the plague.