Friday, April 14, 2006

Expanding Benefits for Some, Trimming Benefits for Others

Not a big surprise who represents the "some" and who represents the "others." But this is still worth noting.

From the Wall Street Journal (via Jonathan Cohn at "The Plank"):

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At a time when companies are scaling back health benefits for other retirees, former top executives at many corporations are receiving partial or full lifetime medical coverage on top of pensions valued at millions of dollars, a Wall Street Journal analysis of dozens of recent securities filings indicates. . . .

The trend spans industries, and it is common at airlines, which have been among the most aggressive in scaling back retirement benefits for the rank and file. Continental Airlines, for example, provides health care "at no cost" for retired Chairman Gordon Bethune and his dependents, the company's proxy statement notes. . . .

Citigroup Inc. promised to pay the premiums and out-of-pocket expenses for both health and dental care for Chairman Sanford I. Weill and his wife now, and it will continue to provide those benefits for the rest of the Weills' lives, the company's proxy statement says. . . .

If current trends continue, the disparity between what a company's regular employees and its top executives receive in retirement is likely to widen. Most companies have set a ceiling on what they will pay for retirees' health coverage and are passing on cost increases to them. When the premiums get too high, retirees who can't afford the cost will drop out or won't sign up.

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I suppose since salaries were already grossly different between employees and executives, it was only a matter of time before benefits like health care and retirement followed suit.

Cohn astutely makes the connection between rising health care costs for employees and the need for universal health care. I'll go a step further and say the universal model needs to involve, at least partially, a single payer system.

But, as Cohn notes, that's a topic for another post...perhaps two or three.

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