Allstate's Greedy Bean Counters Run Amok

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Re: This Is What Happens When Bean Counters Run A Corporatio

Unread postby RatPak11 » Sat Jul 27, 2013 7:29 pm

http://usatoday30.usatoday.com/money/bo ... 50795990/1

'Retirement Heist' compiles evidence of plundered pensions
By Steve Weinberg, Special for USA TODAYUpdated 10/17/2011 4:38 PM

Sometimes the real crime consists of activities considered "legal," despite the damage they cause. That adage has never been more apt than when applied to the termination of pension funds by U.S. employers large, midsize and small. Over and over, loyal, deserving employees with modest incomes have watched their planned retirement savings disappear because of corporate managers and pension industry consultants.

Journalist Ellen Schultz has been writing about such shameful behavior for a long time, mostly in The Wall Street Journal. Now she has pulled together the copious, irrefutable evidence between the covers of a book. It is shocking, and demoralizing. But will members of Congress and federal agency regulators stop what Schultz calls "retirement heists"? Probably not, unless voters make it clear the incumbents will lose their jobs unless something changes. Unfortunately, voters are rarely if ever that organized, no matter how much they have been cheated by corporate chieftains.

The book is crammed with heartbreaking anecdotes of retirees suffering (and in some cases probably dying) because of pension-related corporate greed. But the perpetrators have not been charged with any crimes. In most cases documented by Schultz, the perpetrators have escaped widespread blame — except in her investigative pieces and now in this book.

Schultz opens the book with a look at the December 2010 annual outlook investor meeting sponsored by General Electric and CEO Jeffrey Immelt. (She could have focused on another corporation and another chief executive just as effectively, because the pension heists are so numerous.)

Immelt spoke about the problems for the corporation's profitability caused by the pension plan and medical benefits, announcing those benefits would be closed to newly hired employees.

Immelt and other corporate spokespeople have suggested that pension plan shortfalls are caused by out-of-control factors such as the large number of retirees, declining stock market investment returns and competition from foreign competitors that eschew good benefits for laborers.

Schultz knows better from her extensive research. She is a reporter who has become an expert in a relatively narrow subject matter. As she writes, "What Immelt didn't mention was that, far from being a burden, GE's pension and retiree plans had contributed billions of dollars to the company's bottom line over the past decade and a half, and were responsible for a chunk of the earnings that the executives had taken credit for. Nor were these retirement programs — even with GE's 230,000 retirees — bleeding the company of cash. In fact, GE hadn't contributed a cent to the workers' pension plans since 1987 but still had enough money to cover all the current and future retirees."

Then Schultz delivers the clincher: GE was indeed burdened by a pension plan — the plan for top executives. The obligations of that plan, for a minuscule number of individuals compared with the 230,000 lower-level retirees, totaled $4.4 billion and had drained about $573 million from the corporate treasury over the past three years.

When reading an investigative book, the consumer must decide whether to trust those who are exposed, who usually have a major stake in hiding the truth, or those conducting the exposure, who usually have little or no direct stake in spreading the truth. This book is not even a close call. Schultz's evidence is solid, based on her presentations in the text and the end notes.

How such corporate executives and their retirement heist allies sleep well at night is a puzzle to anybody with a conscience and a sense of fair play.

Contributing: Weinberg is the author of eight non-fiction books.
Last edited by RatPak11 on Wed Sep 04, 2013 3:51 pm, edited 2 times in total.
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Re: This Is What Happens When Bean Counters Run A Corporatio

Unread postby RatPak11 » Sat Jul 27, 2013 7:34 pm

http://freakonomics.com/2012/04/16/the- ... t-robbery/

The Retirement Robbery
Sanjoy Mahajan
04/16/2012 | 12:37 pm

Since putting email back in its corral, I’ve turned some recovered time to reading actual books in print — the latest being Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of American Workers by Ellen E. Schultz. If a nation of sheep shall beget a government of wolves, then the lesson from Retirement Heist is that today the shears are sharpened with numbers.

Retirement Heist is, as one blurb describes, a “meticulously researched and gripping as a crime thriller.” Each chapter explains, with detailed research data and outrage-generating examples, yet another method corporations use to steal retirement benefits and mask the theft behind accounting shenanigans. It is one of the few books (since Cadillac Desert) to describe outrageous behavior so well that I threw it across the room.

In calling the tricks accounting shenanigans, I might be unfairly maligning the accounting profession. From the joke on page 54, I learned the difference between accountants and actuaries:

A CFO is interviewing candidates for a job as a benefits consultant. He calls the first one, an accountant, into his office and asks, “What’s two plus two?” The accountant says, “Four.” The CFO sends him away, calls an actuary into the room, and asks, “What’s two plus two?” The actuary closes the door, pulls down the blinds, then leans in and whispers, “What do you want it to be?” He gets the job.

Among the wonders worked by these benefits, consultants are teaching companies how to degrade benefits without reprisals. One method is to make a series of changes, each perhaps illegal but small enough not to be worth a lawsuit. Then make a big degradation. If anyone sues, the defense is that, by not protesting the earlier changes, employees gave implicit consent to this change.

Among such explanations of wholesale deception, there are a few heartening stories — for example, of Fred Loewy (page 191), an 80-year-old former French resistance fighter and rocket engineer who retired from Motorola and found a $100-per-month error in his pension payment. He politely asked for the amount to be reviewed. After years of denial and runaround, including certified letters sent back unclaimed (the company later described its behavior in court as exhaustive cooperation), he filed a federal lawsuit. It got certified as a class action because the same mistake had been made with hundreds of other retirees. A few months before Loewy died, the retirees won a settlement of $11 million.

One’s joy is tempered because federal pension law (ERISA) includes no punitive damages, not even for such egregious behavior. The damages are limited to rectifying the errors. Thus, it is in the corporate interest to make “mistakes.” The worst that can happen is that an ex-resistance fighter and rocket engineer turns up, and you end up paying some of your legal obligations. Mostly, however, no one notices, or they die while waiting for a speck of justice.

The savings from the shenanigans hardly go to Mother Theresa’s orphanage. Rather, as Retirement Heist demonstrates, they go to outsized pensions and other benefits for executives (such as pumping up the stock price, thereby enriching executives with stock options). For some companies, one-third of their pension obligations were just for the executives.

Mirroring the degradation of retirement security described by Schultz, I’ve been under three pension systems, the second slightly worse than the first, and the third a lot worse.

My first real job was at the University of Cambridge, where I was part of the Universities Superannuation Scheme (USS). I contributed 6.25 per cent of my salary, and Cambridge University contributed 18.75 per cent (triple matching). This total of 25 per cent went to USS, an independent organization set up by the UK universities. At retirement, USS provides a lump-sum payment and a final-salary pension calculated as follows:

After 8 years of service, I left the USS scheme and came to MIT. The MIT plan had a similar pension formula:



For short-term employees, whose average and final salaries are comparable, MIT’s plan with its smaller denominator is better than the USS plan. For long-term employees getting raises at 2-3 per cent (if you can find any), whose final salary is significantly greater than the average salary, the USS plan is better. Furthermore, the USS plan was multi-employer. One could take an academic position anywhere in the United Kingdom and still accumulate years of service.

Both the USS and MIT plans are a traditional, defined-benefit pension where the retiree gets a defined amount at retirement. As Retirement Heist describes, these high-quality plans are the plans that companies have been eliminating (except for their executives).

My third and current plan is a defined-contribution plan. I put in 2.5 per cent of my salary and Olin College puts in 7.5 per cent. This total of 10 per cent contribution is mine to use upon retirement. Great news! However, the 10 per cent that is contributed is a lot less than the 25 per cent that USS uses to provide a decent pension. Furthermore, all the risk is mine. When the invisible hand slaps the world upside the head, turning 401(k)’s into 201(k)’s, it’s my problem. Another 25 years of service on this latest and greatest plan, which I am sad to say is better than what many people in the United States have, might provide me something comparable to what I get for 8 years of service on a real, defined-benefit pension plan. No wonder defined-contribution plans have been called “The 401(k) ripoff.”

After learning of the scams and frauds described in Retirement Heist, I realized perhaps the biggest benefit of the USS scheme: The contributions were real money, and managed by a separate entity whose sole purpose was ensuring that it could pay the pensions it promises. Under the USS system, there are no incentives to shift pension funds toward executive compensation or to use them to pump up the stock price (not least because USS has no stock).

In corporate America, the same entity providing pensions has many other needs, so it uses the pension fund as a casino as much as the law allows and often beyond (with hardly any penalty). As but one example, bankruptcy of the company mostly destroys the workers pension and the company’s pension obligations, giving companies an incentive to go bankrupt.

If the degradation of pensions were done to cure cancer or bring safe drinking water to all the world, I might be happy to make the sacrifice. However, executive compensation and stock-price manipulation are hardly charitable works. The moral of all this: Unless you are an executive with huge payments extracted from the 99 percent, you are being ripped off, and Shultz shows the how and why.
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Re: This Is What Happens When Bean Counters Run A Corporatio

Unread postby RatPak11 » Wed Sep 18, 2013 5:48 pm

http://www.wgrz.com/news/article/226357 ... e-to-Close

Local Allstate Claims Office to Close
7:04 AM, Sep 17, 2013

AMHERST, NY-An Allstate Insurance claims office on Essjay Road in Amherst will close by the end of the year leaving 48 people looking for a new job.

An Allstate spokesperson says the work done at that location will be absorbed by a similar office in Rochester. Those losing their positions will be offered the opportunity to transfer to Rochester or post for other positions within the company.

The spokesperson said the mid-December shut-down is not expected to impact customer service as claims serviced by the Buffalo-area office will now be handled out of Rochester.

Comments:

Liz Woods ·
Allstate sucks anyway. They're overpriced and raise their premiums constantly
Reply · 2 · Like· September 16 at 4:34pm

Blane Kelly ·
Looks like the "Good Hands" people are really the "One Fingered" people
Reply · 1 · Like· September 16 at 3:37pm

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http://www.buffalonews.com/business/all ... r-20130917

Allstate closing Amherst claims office in December
By Matt Glynn | News Business Reporter on September 17, 2013 - 12:23 PM

Allstate will close an insurance claims office in Amherst and combine the operations with a location in Rochester.

Its Essjay Road location, which has 48 employees, is expected to close by Dec. 16.

Allstate cited “improved technology and efficiencies” in making the decision. The company said that with “few exceptions,” employees from the Amherst office will be given the opportunity to work in the Rochester location.

Affected workers will also have the opportunity to post for other positions within the company, and they may be eligible for relocation assistance if they transfer to another city.

Employees who choose not to apply for a different job within Allstate may be eligible for severance benefits, which vary according to an employee’s tenure, Allstate said.

Allstate said the Amherst office was chosen for closing because it was the smallest of its nine claims offices in New York State, as measured by their number of employees.

The company said the closing will not affect customer service and that claims now handled out of the Amherst office will be handled by the Rochester location.

Allstate leases 22,000 square feet at the Essjay building, which opened in 1995 and is owned by Centerpointe Corporate Park Holdings LLC, with Frank Ciminelli as the property’s managing member. Ciminelli Real Estate Corp. manages the property.

email: mglynn@buffnews.com
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Re: This Is What Happens When Bean Counters Run A Corporatio

Unread postby RatPak11 » Wed Sep 18, 2013 6:05 pm

http://www.roanoke.com/news/business/22 ... -jobs.html

Allstate office in Roanoke County again cutting jobs
byJeff Sturgeon | 981-3251Wednesday, September 18, 2013

Job cuts are again pending at Allstate Corp.'s Roanoke County office, a company spokeswoman said Tuesday.

The Northbrook, Ill., insurer will eliminate positions in "technology and operations," spokeswoman Laura Strykowski said by email. Her email did not say how many jobs will end or when.

"Allstate is constantly looking for areas where improvements can be made and efficiency maximized to remain competitive in the marketplace and better serve our customers," Strykowski's email said.

The company, which employed 900 people locally this past spring, previously confirmed local job cuts in early April, late May and late June through a different spokesman, Adam Polak. Polak did not say how many people were displaced but signaled that the number was small. He said in July that "a couple" of positions were moved overseas.
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Re: This Is What Happens When Bean Counters Run A Corporatio

Unread postby RatPak11 » Sun Sep 22, 2013 3:25 pm

http://www.wgrz.com/news/article/226825 ... Tax-Breaks

Allstate Leaving WNY, Despite Numerous Tax Breaks
7:56 PM, Sep 20, 2013
Posted By: Scott Brown

Buffalo, N.Y. - Back in 1990 in order to keep Allstate Insurance and the 150 jobs it had here at the time, developers were given tax breaks to build office buildings for the company in Orchard Park and Amherst.

Five years later in 1995, Allstate was back asking for tax breaks again - this time the company wanted a new office building in Amherst in order to consolidate its operations. In the process it was cutting 60 jobs, going down to 90 employees.

At the time, the Amherst Industrial Development Agency gave a developer a $425,000 tax break to help put up a new building for Allstate in Amherst.

Now 18 years later, after three different tax breaks, Allstate is closing up shop in Western New York, moving the remaining 48 jobs it has left to Rochester.

Assemblyman Sean Ryan says the Amherst IDA should never have given tax breaks back in the 1990s to a company that was reducing the size of its workforce.

Assemblyman Sean Ryan: "The IDA's tax exempt bonds and (other incentives) are for job creation, they're not to subsidize job losses and that's exactly what we did with these mindless tax breaks - we gave a multi-national huge company a lot of our hard earned tax dollars to shrink their footprint in Western New York and now they're saying goodbye."

Scott Brown: "Should we be offering incentives to businesses that are downsizing, that are cutting jobs?"

Jim Allen, Amherst IDA Executive Director: "That's a good question, I do think it's an issue. Now do you incentivize them to move into a new building which would make them more efficient and keep them here or simply say 'no you're downsizing, we're not going to help you.' I mean if you think not helping them is going to result in them leaving the area what do you do? I mean it is an issue, I don't have an answer to that unfortunately, but I do think that's the issue."
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Re: This Is What Happens When Greedy Bean Counters Run Amok

Unread postby RatPak11 » Sat Sep 28, 2013 11:46 pm

http://www.chicagotribune.com/business/ ... 8756.story

Retiree sues Allstate over plan to end free life insurance
By Becky Yerak
Tribune reporter
5:31 p.m. CDT, September 26, 2013

A 32-year Allstate Corp. veteran has sued the Northbrook-based company's recent decision to stop offering free life insurance for retirees.

Montgomery, Ala., resident Garnet Turner, who retired from Allstate in 1995, filed the suit in a U.S. District Court in the Middle District of Alabama on Monday.

Allstate has put a renewed emphasis on cost cutting in 2013.

The lawsuit seeks class-action status, including Allstate retirees who were provided life insurance benefits at no cost but who have been told perk will end Dec. 31, 2015.

Turner, who began working for Allstate as an agent in 1963, received several awards and honors over the decades, the 19-page lawsuit said. Upon his retirement, the company promised to provide him with $90,000 of life insurance for the rest of his life for free, it said.

In July 2013, Allstate said it would reduce some retirement and life-insurance benefits, including determining a new formula to calculate pensions and ending free retiree life insurance. It has also announced layoffs recently.

At the time, Allstate said that the changes brought it more in line with the benefits that other companies were offering. It also noted that it offers workers a pension and a 401(k) plan, though relatively few large companies offer both.

On Thursday, Allstate spokeswoman Laura Strykowski said the company is reviewing the complaint.

"Allstate provides its employees with a contemporary and competitive benefit package," she said."The changes we are making to our retirement and life insurance benefits bring us more in line with benefits offered in the marketplace."

Turner is represented by Heninger Garrison Davis LLC of Birmingham, Ala.

byerak@tribune.com |Twitter: @beckyyerak

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Comments:

Donna Randall Fillie ·
"You're in good hands with Allstate." Yeah, right!


Bob Thompson ·
Those good hand 's just dropped the ball again sewing the help ,maybe they ill be able to pay there claims and advertise less I'm tried of seeing that guy that played president on 24!! of course he would have done better job then that clown Obama
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Re: This Is What Happens When Greedy Bean Counters Run Amok

Unread postby RatPak11 » Wed Oct 02, 2013 2:41 pm

http://finance.yahoo.com/news/allstate- ... 00884.html

Allstate Insurance Company sued by company retirees
By Heninger Garrison Davis, LLC
Last modified: 2013-09-30T11:13:28Z
Published: Monday, Sep. 30, 2013 - 4:13 am

BIRMINGHAM, Ala. /PRNewswire/ Allstate retiree Garnet Turner is suing the insurer to protect the life insurance benefit he claims he was promised.
Turner, a resident of Montogmery, Alabama, and a 32 year veteran Allstate agent, was notified by Allstate in July that the benefit would be cancelled in 2015.

Turner, who retired in the 1990s, filed suit after receiving that news. He is represented by the national law firm Heninger Garrison Davis. HGD partner Lew Garrison blames the company for trying to boost its bottom line on the backs of retirees. "Allstate should not profit from broken promises to its most productive and important employees," he said. "These folks worked hard for years and sold a lot of Allstate policies, and they rely on the company to maintain the retirement benefits promised."

Turner began working for Allstate as an agent in 1963 and received several awards and honors over the decades. On retirement, as a benefit, he was promised a $90,000 life insurance policy for the rest of his life, at no charge to him, according to his attorneys.

The cancellation of the benefit coincides with a cost-cutting campaign by Allstate. The Chicago Tribune, in a report in July, the same month Allstate notified Turner, called the cost-cutting a top priority of the company. Turner's attorneys filed the suit in response. It is a class action for all retirees affected

More is at stake than a broken promise, the attorneys say. Retirees like Turner, in view of their age, likely cannot get replacement insurance. HGD attorney Taylor Bartlett, who also represents Turner, explains: "Based on Allstate's promise, Turner and other retirees chose not to purchase fixed-cost life insurance at a younger age when such insurance was reasonably priced. These retirees cannot find life insurance today at reasonable rates and may be forced out of their coverage as a result."

Turner's suit is Turner v. Allstate Insurance Co., 2:13-cv-00685-MEF, filed in the U.S. District Court for the Middle District of Alabama.
Heninger Garrison Davis is headquartered in Birmingham with offices in Atlanta, Los Angeles, New Jersey, New York and Washington, D.C. and focuses on Business Litigation, Class Actions and Mass Torts, Intellectual Property and Personal Injury. Please visit http://hgdlawfirm.com to learn more about the firm.

Contact: Kristi Ozley kozley@hgdlawfirm.com Heninger Garrison Davis 2224 1st Avenue North Birmingham, Alabama 35203 (205) 326-3336 Toll Free: 1-800-241-9779

SOURCE Heninger Garrison Davis, LLC
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Re: This Is What Happens When Greedy Bean Counters Run Amok

Unread postby RatPak11 » Thu Oct 03, 2013 12:35 pm

http://www.topix.com/forum/personal-fin ... L4ITO4Q#c1

Tennis Ted
Cape Coral, FL
Jul 25, 2013

ONE OF THE MOST UNFAIR, UNJUST MOVES A COMPANY COULD MAKE.
I SPENT 35 YEARS AS A SENIOR ACCT AGENT WORKING FOR ALLSTATE, PART OF MY RETIREMENT PACKAGE WAS 100K LIFE POLICY. A FEW OF MY CO-WORKERS PASSED OVER THE YEARS AND THEIR FAMILIES COLLECTED THIS BENEFIT. UNFORTUNATELY, MINE WON'T, WHY? BECAUSE MR. "WHO CARES" WILSON THE CEO OF ALLSTATE SIMPLY DECIDES "WE AIN'T PAYIN FOR THIS ANYMORE". OH! WE CAN PAY FOR IT OURSELVES GEE....AGE 75 500 PER MONTH...AGE 85 1750. PER MONTH. SO NOW MR. WILSON KNOWS THE RETIREES WON'T PAY THIS AND THE COMPANY WILL NEVER PAY THE BENEFIT. OUUUUCHH.
I HOPE OTHER AGENTS READ THIS AND SOMEHOW WE CAN GET A CLASS ACTION SUIT AGAINST IMMORAL DECISION.
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Re: This Is What Happens When Greedy Bean Counters Run Amok

Unread postby RatPak11 » Fri Oct 04, 2013 2:08 am

http://finance.yahoo.com/mb/ALL/#mbt=Me ... b-tab-allm


Allstate Launches New Whole Life Insurance Product
olderagent1 by olderagent1 • Jul 30, 2013 4:01 PM

The above headline was taken from an Allstate Newswire release dated July 30th, and it comes less than a week after notifying its retirees that the company will no longer honor paid-up life insurance policies that were fully earned after 30 years of continuous service. Oh, yes, this is the very same Allstate that also reneged several years ago on all of its retiree health contracts. The same Allstate that now says thousands of those 70, 80, and 90-year old retirees must pay the premiums as of January 1, 2016 for all those supposedly paid up contracts, or die before that date if they want to keep the coverage that they had been assured was 100% earned. Oh, before I forget, Allstate has sold all of these contracts to a little known life company in Minnesota, and when contacted, their frontline folk parrot that they know nothing about what has taken place, and definitely have no idea what those pesky premiums will be. SURPRISE!



Allstate Launches New Whole Life Insurance Product - Continued
olderagent1 by olderagent1 • Jul 30, 2013 4:02 PM

And, now, Allstate has the gall to tout a new life product for an unsuspecting public to buy? But it does so only after selling off all of its profitable life entities to other companies within the past couple of years. For what? one could reasonably ask. Why, to enhance the bottom line, according to CEO Tom Wilson. And morality be damned. Legality be damned. Really? Life contracts have been sacrosanct for well over 100 years in America, and every life company has prospered because of that inviolable contract between company and policyholder. The universal creed of all such contracts has been cast in stone: The Company can NEVER change the terms and conditions of the contract without a signed and dated agreement by both parties; and the change must be to the BENEFIT of the policyholder, and NEVER to his detriment. And the contestability period for all life contracts was--and still is--two years. Twenty-four months for the company to inspect the risk to discover if any fraud exists; and if it does, to nullify the contract and reimburse all premiums paid to date by the policyholder. Well, Allstate has just abrogated all sense of that trust between a policyholder and the company by singlehandedly turning 100 years of fair dealing on its head. And included in this sizeable group of retirees are the very same agents who proudly sold Allstate’s life products for the last 60 years. Because if a company will do this to its defenseless retirees, just what should the public expect when it comes time for Allstate to honor their contracts?

Do you want to know what the true bottom line is, Mr. Wilson? It’s the low, dark day you have just created for the life insurance industry of America by a deceitful management team that knows no shame. And can you truly say without wearing your usual smirk: You’re in Good Hands with Allstate?

Something tells me neither you nor Allstate has heard the last of this – not by a long shot![url][/url]
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Re: This Is What Happens When Greedy Bean Counters Run Amok

Unread postby RatPak11 » Mon Oct 14, 2013 4:14 pm

http://www.wsfa.com/story/23588947/alls ... y-retirees

Allstate Insurance Company sued by company retirees
Posted: Oct 02, 2013 6:57 AM PDT
Updated: Oct 12, 2013 6:57 AM PDT

BIRMINGHAM, AL - Allstate retiree Garnet Turner is suing the insurer to protect the life insurance benefit he claims he was promised. Turner, a resident of Montgomery, Alabama, and a 32?year veteran Allstate agent, was notified by Allstate in July that the benefit would be cancelled in 2015.

Turner, who retired in the 1990s, filed suit after receiving that news. He is represented by the national law firm Heninger Garrison Davis. HGD partner Lew Garrison blames the company for trying to boost its bottom line on the backs of retirees. "Allstate should not profit from broken promises to its most productive and important employees," he said. "These folks worked hard for years and sold a lot of Allstate policies, and they rely on the company to maintain the retirement benefits promised."

Turner began working for Allstate as an agent in 1963 and received several awards and honors over the decades. On retirement, as a benefit, he was promised a $90,000 life insurance policy for the rest of his life, at no charge to him, according to his attorneys.

The cancellation of the benefit coincides with a cost-cutting campaign by Allstate. The Chicago Tribune, in a report in July, the same month Allstate notified Turner, called the cost-cutting a top priority of the company. Turner's attorneys filed the suit in response. It is a class action for all retirees affected.

More is at stake than a broken promise, the attorneys say. Retirees like Turner, in view of their age, likely cannot get replacement insurance. HGD attorney Taylor Bartlett, who also represents Turner, explains: "Based on Allstate's promise, Turner and other retirees chose not to purchase fixed-cost life insurance at a younger age when such insurance was reasonably priced. These retirees cannot find life insurance today at reasonable rates and may be forced out of their coverage as a result."



More information on the suit may be found on the Chicago Tribune webpage, at http://articles.chicagotribune.com/keyw ... state?corp, and at http://www.allstatelawsuit.com.

Turner's suit is Turner v. Allstate Insurance Co., 2:13-cv-00685-MEF, filed in the U.S. District Court for the Middle District of Alabama.

Heninger Garrison Davis is headquartered in Birmingham with offices in Atlanta, Los Angeles, New Jersey, New York and Washington, D.C. and focuses on Business Litigation, Class Actions and Mass Torts, Intellectual Property and Personal Injury. Please visit http://hgdlawfirm.com to learn more about the firm.

Source: PRnewswire.com;
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Re: This Is What Happens When Greedy Bean Counters Run Amok

Unread postby RatPak11 » Thu Nov 14, 2013 10:40 am

http://www.wsls.com/story/23943441/reti ... -insurance

Retired Allstate employees picket for life insurance
Posted: Nov 12, 2013 6:16 AM PST
Updated: Nov 13, 2013 9:09 AM PST
By Ananda Rochita

ROANOKE COUNTY - Allstate insurance company sent letters to some retired employees and in it states that the company would stop paying for life insurance benefits by January 1st 2016.

Dozens of retired employees are picketing against it in front of the Roanoke office.

It didn't cost the retired employees to have life insurance and now have to choose whether to pay a monthly premium or go without it. Some of the picketers say they couldn't afford it and can't find something cheaper because of their age or health conditions.

"I've had breast cancer twice and my chances of getting insurance again due to my age and my health issues I'll never get it," says Kathy Shepherd, retired Allstate employee.

Sherry Thurman who worked with Allstate for 42 years and says she's upset that the money she saved for her retirement will be used for something unexpected.

"You're living on a smaller income," says Thurman. "You don't get cost of living increases all you live off of is what you saved while you were working and also your social security."

Some of the protestors are represented by an Alabama based lawyer under Heninger Garrison Davis and he told us he's representing about 600 retire employees nationwide but that number grows by the dozens daily.

Senior corporate relations manager Laura Strykowski sent us this statement:

"Allstate respects and values the contributions of our company's employees and retirees. We have recently made changes to our retirement and life insurance benefit programs for a number of reasons, including to bring us more in line with benefits offered in the marketplace. These changes have been made in accordance with the plan parameters for our various employee and retiree benefit offerings. The company continues to provide employees with a contemporary and competitive benefit package, including a pension, a 401(k) plan and numerous other benefits."
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Re: This Is What Happens When Greedy Bean Counters Run Amok

Unread postby RatPak11 » Thu Nov 14, 2013 10:50 am

http://www.roanoke.com/news/business/23 ... store.html

Picket in Roanoke Co. urges Allstate to restore benefits
Former employees are upset the company has done away with the free life insurance it long pledged.
byJeff Sturgeon | 981-3251Wednesday, November 13, 2013

Upset former employees of Allstate Corp. in Roanoke County say they hope a picket Tuesday near the company’s Electric Road office and a recent federal lawsuit have sent the company a message: Don’t eliminate free retiree life insurance.

Allstate this past summer announced the end of free and permanent life insurance coverage for qualified retirees in 2016. Retirees can buy a policy if they want, but many don’t believe they should have to buy a product that was promised for free.

In addition, the retirees say that given their ages and, in some cases, medical conditions, new insurance could be impossible to obtain or too costly outside of what they see as a high-priced option established by Allstate.

One retiree, in Montgomery, Ala., has alleged deceptive practices in a federal lawsuit. He’s 81 and can’t afford to pay the nearly $1,000 a month in premiums it would take to sustain coverage, according to his attorney, who has asked a judge to open the case to all similarly affected Allstate retirees.

Allstate retirees in the Roanoke region, who could join the lawsuit if it is declared a class action, went public with their concerns by massing in front of Allstate on Tuesday morning.

“It makes me sad the company that we gave the best of our lives to would turn around and do this,” said Kathy Shepherd of Roanoke County, who stood with between 20 and 25 protesters on the shoulder of Electric Road for two hours.

The goal of the picket was to let Allstate’s home office in Northbrook, Ill., know that its Southwest Virginia retirees are unhappy, according to protesters.

Several retirees said they still have the retirement paperwork to prove Allstate promised them free, post-employment life insurance until death, Shepherd said. But the global corporation, which took in nearly $29 billion in premiums last year, has decided to renege. Allstate also has trimmed its pension-benefit formula and announced layoffs in Roanoke County and elsewhere. Company spokeswoman Laura Strykowski said the benefit cuts are designed to bring Allstate, which employed 38,000 people at the end of last year, more in line with the benefits that other companies offer.

A promise was made, however, according to retirees, who say they intend to fight to keep the life insurance by telling the public what Allstate has done and by legal means, if necessary.

Allstate is no longer behaving like the company it once was, said Carolyn Sommardahl of Roanoke, retired after nearly 15 years of service.

“To me, they’ve forgotten about the people, and it’s the bottom line now,” she said.

“We’re not in Good Hands,” read one sign at the protest, while another said: “Allstate breaks their promise to retirees.”

The retirees said their other Allstate retirement benefits appear to be intact, including access to health insurance and pension checks for those who receive them. The trimming of retirement benefits does not directly affect or coincide with any changes to Allstate insurance products sold to the public.

The lawsuit, filed Sept. 23 in the Middle District of Alabama in Montgomery, accuses the company of breaching a duty to provide workers accurate benefit information. If that’s proven, it would violate the Employee Retirement Income Security Act of 1974, a type of consumer-protection law governing pension and health plans in the private sector, the suit said.

The promise of free insurance was “misleading and false,” according to the lawsuit, though employees relied upon it in their financial planning and did not buy other insurance.

Offering retirees an option to buy coverage is “a radical departure from the benefits previously provided, promised, and represented,” the lawsuit said.

Shepherd, 61, who has had cancer, is unsure of her ability to purchase new insurance on her own. Guaranteed coverage that Allstate is offering through a separate company, Minnesota Life, would cost $22 a month to sustain her current benefit of $16,800, according to a table the company gave retirees. The rates retirees were given are good from 2016 through 2018 and increase with age, and could increase again after 2018, Shepherd noted. By her math, if she lives to 84, she could pay more in premiums than the life insurance benefit to which her heirs would be entitled.

Anna Crockett, 85, of Roanoke retired from Allstate after 21 years with a $13,000 life insurance policy she expected to maintain free of charge for the rest of her life. Under the payment option, she would owe $227 a month.

“That’s crazy,” Crockett said.

The Alabama man who instigated the suit, Garnet Turner, 81, was for 32 years a sales agent whose high productivity earned him a $90,000 life insurance policy, $10,000 beneath the maximum retiree life insurance benefit of $100,000, attorney Taylor Barlett in Birmingham said. To buy the same coverage would cost Turner $972 a month, according to the table.
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Re: Allstate's Greedy Bean Counters Run Amok

Unread postby RatPak11 » Fri Nov 22, 2013 6:52 pm

*For the complete report, click onto the URL address below:

http://www.insurancenetworking.com/news ... 359-1.html

Allstate, Prudential and 3 Other Insurers File Q3 Earnings
As the P&C industry benefits from reserve releases and few catastrophes, insurers with stand out returns include Partner Re and AIG, according to an analyst.
INN Breaking News, November 8, 2013
Chris McMahon

Overall, the insurance industry has experienced an excellent quarter, leading Clifford Gallant, equity analyst for Nomura Securities International to wonder if this is as good as it gets.

“The P&C industry had a great quarter,” Gallant said. “We typically expect the third quarter to take some storm losses. But this year has been a particularly fortunate year. There were really no U.S. catastrophic events, and even globally the number of insured events have been small. Revenues were up in terms of premiums, positive pricing increases have come through and the industry benefited from reserve releases as well. All around, it was a very good earnings quarter for the industry.”

Insurers with stand out returns, Gallant said, include Partner Re and AIG.

“Partner Re had a great quarter. They are a reinsurance company and they had a blow out earnings quarter,” Gallant said. “Their earnings doubled what Wall Street had estimated and it was both low catastrophes and great reserve releases. AIG had a good quarter, but in a time when everyone else beat by a lot, they were sort of inline and that was perceived as a disappointment. And management there kind of backed off some of their long-term aspirational goals. It was a mild disappointment.”

Another is AON, which while a strong performer, Gallant said, likely will benefit from the launch of health insurance exchanges over the long term.

“My view is that even though it was a pretty good quarter, I’m a little bit cautious; this is as good as it gets. As an investor, you can’t expect to see these types of quarters in the future and you need to value the group with a little more caution that extrapolating from the third quarter.”

Gallant’s other caution on the industry is that strong earnings could result in downward pressure on prices as insurers battle for market share.

A number of insurers recently released their financial results for Q3. The following is a compilation of their announcements.

Allstate Corp.

Allstate reported Q3 2013 net income of $310 million, or $0.66 per diluted common share, compared to $723 million, or $1.48 per diluted common share, for the same period last year. The decline was mostly attributable to a $475 million after-tax loss on the disposition of Lincoln Benefit Life Company.

Operating income was $713 million, or $1.53 per diluted common share, compared to $717 million, or $1.46 per diluted common share, for the same period last year.

Profitability improved in for Property-Liability and Allstate Financial compared to the prior-year quarter.The Property-Liability recorded Q3 2013 combined ratio was 90.0, while the underlying combined ratio was 86.9, a 0.9 point improvement from the prior year quarterPre-tax catastrophe losses were $128 million, the lowest since Q3 2002.Review of reserves in discontinued lines and coverages resulted in net reserve strengthening of $86 million.Operating income improved $30 million to $127 million, compared to the same period last year.

"Strong results this quarter reflect the benefits of a broad and comprehensive approach to creating shareholder value," said Thomas Wilson, chairman, president and CEO. "Operating income of $713 million was strong, with the underlying combined ratio better than the goal established for the full year, and progress was made on all 2013 operating priorities.”

Lower catastrophe losses helped lift results, and growth improved as a result of serving consumer segments with differentiated offerings, Allstate said. Allstate auto policies increased compared to the prior year due to improved retention, higher new-business sales and a less adverse impact from actions on homeowners policies.

“We also continued to grow in the consumer segments served by Esurance and Encompass,” Watson said. “Progress was made to balance risk and return and properly deploy capital by the proposed sale of Lincoln Benefit Life, share repurchases, reduction of interest rate risk and execution of our capital management strategy."

*Hmmm…strange that Tom Wilson, Allstate’s CEO and top bean counter, did not take this opportunity to report on his brainchild to reduce as well as cut their employees retirement and life insurance benefits. This would include the cancellation of life insurance policies of former employees who have been retired for years and who relied on this promised benefit as part of their retirement package in planning their estate. It would seem the company bean counters should be proud of their greedy initiative to save on staffing costs and would use this forum to boast about their endeavors to swindle their past and present hardworking employees so they could save on 'expenses'. Would that not have a definite impact on Allstate’s quarterly results as well as the future quarterly results? I wonder what kind of impact the upcoming lawsuits will have on Allstate’s profitability. I also wonder what kind of salary and bonus Tommy Boy and his cronies are going to give themselves this year, for a job THEY call 'well done’? These selfish idiots have no character nor do they have any shame. However, if they can break their promises to their customers I guess they can also break their promises to their own employees as well.
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Re: Allstate's Greedy Bean Counters Run Amok

Unread postby RatPak11 » Sat Nov 23, 2013 4:52 pm

http://www.hgdlawfirm.com/allstate-lawsuit/

Allstate Retiree Lawsuit

According to our investigation, in July of this year (2013), Allstate Insurance Company notified many of its retirees that it would cease paying for retiree life insurance benefits, effective January 1, 2016. The retirees trusted Allstate to follow through on its promise of lifetime life insurance benefits, they relied on that promise, and they have planned their retirement accordingly. Most notably, many retirees chose not to purchase their own fixed-cost life insurance at a younger age when such insurance was more reasonably priced. These retirees cannot find life insurance today at reasonable rates and may be forced out of their coverage as a result. If you have received such a notification, or Allstate has stopped paying your retiree life insurance benefits, and would like a free evaluation of your legal options, then please contact Taylor Bartlett at 205-326-3336 or 1-800-241-9779.






Allstate Insurance Company sued by company retirees

*If you're a retired Allstate Employee and need help with what Allstate is trying to do to you and your loved ones, it wont hurt to sign up and it wont cost you a thing:
http://www.napaausa.org/news.asp?id=791


Essential Information

Allstate Insurance Company sued by company retirees

If you or someone you know are being affected by Allstate's decision to cancel its promised retiree life insurance benefits, you may have a legal claim against Allstate. This includes agents, claims and all other employees retired since 1990.
The law firm in the Allstate Retiree Lawsuit is accepting clients on a contingency basis with no out-of-pocket expenses for retirees.

To learn more, go to http://www.hgdlawfirm.com/allstate-lawsuit/ or contact:

Taylor Bartlett
Taylor@hgdlawfirm.com
Heninger Garrison Davis
2224 First Avenue North
Birmingham, AL 35203
205-326-3336 / Toll Free: 800-241-9779


NAPAA has provided this notice for informational purposes only. The contents of this notice should not be construed as legal advice or an endorsement from NAPAA or its attorneys, and NAPAA expressly disclaims any such advice.

The views expressed by NAPAA, or any of its positions relative to its activities and those of its members' actions on behalf of this organization, are expressly those of NAPAA, and do not reflect the views or opinions of Allstate Insurance Company, or any of its affiliates


Allstate Insurance Company sued by company retirees
Sept. 30, 2013, press release, Heninger Garrison Davis, LLC

BIRMINGHAM, Ala., Sept. 30, 2013 /PRNewswire via COMTEX/ -- Allstate retiree Garnet Turner is suing the insurer to protect the life insurance benefit he claims he was promised. Turner, a resident of Montgomery, Alabama, and a 32--year veteran Allstate agent, was notified by Allstate in July that the benefit would be cancelled in 2015.

Turner, who retired in the 1990s, filed suit after receiving that news. He is represented by the national law firm Heninger Garrison Davis. HGD partner Lew Garrison blames the company for trying to boost its bottom line on the backs of retirees. "Allstate should not profit from broken promises to its most productive and important employees," he said. "These folks worked hard for years and sold a lot of Allstate policies, and they rely on the company to maintain the retirement benefits promised."

Turner began working for Allstate as an agent in 1963 and received several awards and honors over the decades. On retirement, as a benefit, he was promised a $90,000 life insurance policy for the rest of his life, at no charge to him, according to his attorneys.

The cancellation of the benefit coincides with a cost-cutting campaign by Allstate. The Chicago Tribune, in a report in July, the same month Allstate notified Turner, called the cost-cutting a top priority of the company. Turner's attorneys filed the suit in response. It is a class action for all retirees affected.

More is at stake than a broken promise, the attorneys say. Retirees like Turner, in view of their age, likely cannot get replacement insurance. HGD attorney Taylor Bartlett, who also represents Turner, explains: "Based on Allstate's promise, Turner and other retirees chose not to purchase fixed-cost life insurance at a younger age when such insurance was reasonably priced. These retirees cannot find life insurance today at reasonable rates and may be forced out of their coverage as a result."

More information on the suit may be found on the Chicago Tribune webpage, at http://articles.chicagotribune.com/2013-09-26/business/ and at http://www.allstatelawsuit.com.

Turner's suit is Turner v. Allstate Insurance Co., 2:13-cv-00685-MEF, filed in the U.S. District Court for the Middle District of Alabama.

Heninger Garrison Davis is headquartered in Birmingham with offices in Atlanta, Los Angeles, New Jersey, New York and Washington, D.C. and focuses on Business Litigation, Class Actions and Mass Torts, Intellectual Property and Personal Injury. Please visit http://hgdlawfirm.com to learn more about the firm.


Heninger Garrison Davis

2224 1st Avenue North

Birmingham, Alabama 35203

(205) 326-3336 Toll Free: 1-800-241-9779



SOURCE

Copyright (C) 2013 PR Newswire. All rights reserved
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Re: Allstate's Greedy Bean Counters Run Amok

Unread postby RatPak11 » Sun Nov 24, 2013 12:28 pm

http://ifawebnews.com/2013/11/24/allsta ... -benefits/

Allstate retirees picket reversal of life insurance benefits
By IFAwebnews Staff
Posted: November 24, 2013

Former employees of Allstate Corp. in Roanoke County, Va., picketed nearby the company’s Electric Road office to protest Allstate’s decision to end free and permanent life insurance coverage for qualified retirees in 2016.

The move to end free life insurance for retirees was announced in the summer. According to a report in The Roanoke Times, Allstate said it made the benefit cuts to bring the company more in line with the benefits that other companies offer.

However, one retiree in Montgomery, Ala., has filed suit against Allstate in federal court alleging deceptive practices. His attorney has asked a judge to open the case to all similarly affected Allstate retirees, according to the report.
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Re: Allstate's Greedy Bean Counters Run Amok

Unread postby RatPak11 » Sat Dec 14, 2013 12:34 pm

Zacks’ report tells the actual story: the changes in employee benefits impacts the bottom line of Allstate’s share values, whereas Tommy Boy did not have the balls to make that statement for Allstate’s 3rd quarter results announcement.
See:

http://www.insurancenetworking.com/news ... 359-1.html



*Anyone taking bets on the pay and bonus increases for Tommy Boy and his henchmen?



*From the article (with my addendum noted in red):

'Allstate's third-quarter earnings outperformed the Zacks Consensus Estimate based on benefits arising from *(the negative) changes made in employee benefit plans, all of which boosted the operating income across segments, operating cash flow and book value per share.'



http://www.nasdaq.com/article/allstate- ... t-cm311190

Allstate Corp. (ALL): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report
By Zacks.com, December 13, 2013, 07:00:01 AM EDT

Summary:
Allstate's third-quarter earnings outperformed the Zacks Consensus Estimate based on higher premiums, lower catastrophe losses and benefits arising from changes made in employee benefit plans, all of which boosted the operating income across segments, operating cash flow and book value per share. However, a depreciated investment portfolio, loss on disposition of Lincoln Benefit along with higher claims, and operating expenses deteriorated the bottom line and ROE. Yet, the debt refinancing is likely to improve leverage and strengthen capital. The divestment of Lincoln Benefit and business restructuring will also mitigate market risks and enhance operating leverage. Agency expansions, healthy rating, and efficient capital deployment further help retain shareholder confidence. Continued synergies from Allstate's industry-leading position, diversification and pricing discipline augur long-term growth, justifying our Neutral recommendation.

Overview:
Founded in 1931 and headquartered in Northbrook, Illinois, Allstate Corporation is the second-largest property-casualty (P&C) insurer and the largest publicly-held personal lines carrier in the U.S. The company also provides a range of life insurance and investment products to its diverse customer base. Allstate provides insurance products to approximately 16 million households through more than 12,000 exclusive agencies and financial specialists in the U.S. and Canada. The company operates through its subsidiaries - Allstate Insurance Company, Allstate Life Insurance Company and affiliates. As of Dec 31, 2012, Allstate had approximately 38,000 full-time employees and 600 part-time employees.

The company primarily operates through three reportable segments: Allstate Property-Liability, Allstate Financial Group and Corporate & other.
The Property-Liability segment primarily underwrites policies relating to private passenger automobile and homeowners' insurance in the U.S. and Canada. The company sells Allstate branded policies through Allstate agencies and through the Internet, besides selling Encompass, Esurance and Answer Financial brand policies through its network of independent agencies. Allstate acquired Esurance and Answer Financial from White Mountains Insurance Group Ltd. for approximately $1.0 billion in Oct 2011, in an attempt to expand its online home-auto sales.
Allstate Financial Group provides life insurance, retirement policies and structured financial products to individual and institutions through Allstate agencies, independent agencies, financial institutions and broker-dealers. This segment also offers banking products and services to customers through the Allstate Bank.
Corporate & Other consists of conducting holding company activities and certain non-insurance operations.

Meanwhile, Allstate ceased the operations of Allstate Bank in 2011, after receiving regulatory approval to dissolve it. In Mar 2012, the company also annulled the bank's charter and as of Jul 1, 2012, Allstate is no longer a savings and loan holding company.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc
.
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Re: Allstate's Greedy Bean Counters Run Amok

Unread postby RatPak11 » Sat Dec 21, 2013 5:51 pm

http://www.zacks.com/stock/news/117555/ ... t-allstate

Pension Costs to Hurt Q4 at Allstate
by Zacks Equity Research Published on December 20, 2013

Home and auto insurer, Allstate Corp. (ALL - Analyst Report) announced that its pre-tax catastrophe (CAT) estimates for Nov 2013 has been within limits. However, pension obligations are projected to hurt the fourth-quarter 2013 earnings.

In order to generate greater transparency, since 2011 Allstate has always disclosed its quarterly and monthly CAT loss estimates if the amount exceeded $150 million in any month. The CAT losses for Nov 2013 were well within this limit.

Nonetheless, the lump sum pension obligations toward staff retiring this year are estimated to pinch the fourth quarter’s earnings between $100 million and $120 million. Allstate also bore a post-tax pension settlement charge of $49 million (pre-tax $76 million) in third-quarter 2013.

Previously, management estimated net periodic pension cost to be $333 million in 2013 based on current assumptions, including settlement charges. This is likely to be higher than $266 million in 2012 and $304 million in 2011. Meanwhile, Allstate already recorded $29 million of net periodic pension cost in the first nine months of 2013, up 43.3% over the prior-year period.

The pension costs are charged to the ‘corporate and other’ segment of the company. An increase in voluntary activity amid the historically low level of interest rates tends to amplify the company’s payout obligations in order to make contributions to the pension plans. This, in turn, hampers financials and negates growth from core fundamentals.

Nevertheless, Allstate has chalked out a new cash balance formula to calculate the pension benefits of its retiring employees in future. The re-measurement replaces the existing formula and takes in to account the current market dynamics. The amendment also supported an accretion of $599 million to Allstate’s book value in third-quarter 2013 and is expected to reduce expenses in future as well, thereby reflecting Allstate’s prudent risk management.

Allstate presently carries a Zacks Rank #2 (Buy). Other stocks worth considering in the insurance sector include HCI Group Inc. (HCI - Snapshot Report), The Hanover Insurance Group Inc. (THG - Snapshot Report) and Hallmark Financial Services Inc. (HALL - Snapshot Report). All these stocks sport a Zacks Rank #1 (Strong Buy).
-----------------------------------------------------------------------------------------------------------------------

*Boo, Hoo-Poor Allsnake is crying that their bottom line is being hurt by its pension obligations. What a spin! Allstate Insurance always had pension obligations. Just like the Board of Directors paychecks, employees paychecks, medical insurance, buildings, claim payouts, etc. All these payout commitments hurt the bottom line. These are all monetary obligations of Allstate Insurance. The greedy Board Of Directors just want to reduce Allsnake's contractual responsibilities so THEY can make more money off their employees backs. This means more cash for Allstate's bottom line and this will make the stock price go up, just like Tommy Boy's and his henchmens bonus'.

Hey Tommy Boy! Here's An Idea: Why don't you and your henchmen contribute your bonus checks to the employees retirement fund so that they will not have to suffer the reduced retirement plan they've already worked so hard for. These dedicated employees are working their butts off for you so that you can rake in millions on YOUR paycheck. NO? I didn't think so. After all, why would you want to take care of those who work so hard to make you look so good? By the way, that was a rhetorical question. You make yourself look bad all by yourself.
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Re: Allstate's Greedy Bean Counters Run Amok

Unread postby RatPak11 » Wed Dec 25, 2013 11:06 am

http://www.insurancejournal.com/news/na ... 315295.htm

Allstate Reports Q4 Pension Settlement Charge of $100-125M
December 24, 2013

The Allstate Corp. reported that it expects to report a fourth-quarter 2013 settlement charge of $100 to $125 million, after-tax, related to the annual measurement of its pension obligations as of Dec. 31, 2013.

Settlement charges are non-cash charges that accelerate the recognition of unrecognized pension benefit cost that would have been incurred in subsequent periods when plan payments, primarily lump sums from qualified pension plans, exceed a threshold of service and interest cost for the period.

The value of lump sums paid to employees electing retirement in 2013 is elevated due to historically low interest rates, Allstate said in a statement, noting that voluntary retirement activity during the fourth quarter was almost five times the typical level.

In conjunction with announced changes to employee pension benefit plans, the company’s third quarter reports included a settlement charge of $49 million, after-tax, and indicated that the fourth quarter might include an additional settlement charge of a comparable or greater amount.

Allstate said the settlement charge will be reported in the “corporate and other” segment and impacts operating income, but does not affect underwriting income or combined ratios.

Beginning in 2014, all Allstate employees will earn future pension benefits under a new cash balance formula rather than the current formulas. These changes better align with market practices and provide future pension benefits more equitably to Allstate employees, Allstate said, adding that the changes added $599 million of book value in the third quarter of 2013 and will reduce future expenses.

In the same media statement, Allstate reported on catastrophe losses, noting that the carrier’s November cat loss total did not exceed a $150 million reporting threshold.

Source: The Allstate Corp.
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Re: Allstate's Greedy Bean Counters Run Amok

Unread postby RatPak11 » Sun Feb 09, 2014 9:38 pm

After this AOL employee benefits fiasco, maybe Tommy Boy will see the error of his ways but don’t count on it. Or, how about if there were more media coverage and public outcries from the Allstate employees regarding Allstate’s greedy cuts to the employee retirement and life insurance benefits. Maybe that would bring Tommy Boy around.:
Ratpak11

http://mashable.com/2014/02/09/aol-ceo- ... p-forward/

AOL CEO Reverses Controversial Benefits Decision, Wife of Staffer Steps Forward
Adario Strange
02-09-2014

A company’s inner-office policies can be a sensitive topic, particularly when that office is AOL, one of the most high-profile media brands on the Internet, and especially when the topic is employee benefits.

That’s why when AOL CEO Tim Armstrong was reportedly heard during a recent conference call linking a change to the company’s 401(k) benefits package to the birth of two “distressed babies,” which he claimed cost the company $1 million each, the public’s reaction was, shall we say, less than favorable.

In a transcript detailing the offending comment, published by Re/Code on Feb. 6, Armstrong said:

We had a $7.1 million bill from the Obamacare act in general and we had multiple other things that happened at the company healthcare-wise. Two things that happened in 2012 we had two AOLers that had distressed babies that were born that we paid a million dollars each to make sure those babies were okay in general.

The benefits change in question specifically referred to Armstrong’s plan to delay the delivery of employee matching 401(k) payments, delivering them in a single lump sum, which would be paid after the year in which the benefit was earned.

In addition to a follow-up internal memo, presumable designed to quell the anger surrounding his comments, Armstrong further backed up his viewpoint during an appearance on CNBC, during which he specifically cited Obamacare as part of the issue affecting the company’s benefits package for employees.

Immediately following the wide exposure of Armstrong’s comments, the public’s outrage was made plain via social media. A number of well-known media professionals knocked the already embattled CEO for what many viewed as a callous approach to cost cutting.

That social media storm was swiftly followed by an open letter to Armstrong from AOL employees, which stated, in part:

We strongly object to the new 401(k) matching practice and encourage the company to reverse its policy. Single lump-sum 401(k) contributions are an unnecessarily risky investment strategy and deprive workers who leave the company of retirement benefits they have earned.

Following the general outrage, which showed no signs of letting up, on Feb 8. Armstrong reversed his decision, sending out an internal memo that AOL-owned site Techcrunch published the same day. In the letter, Armstrong wrote:

The leadership team and I listened to your feedback over the last week. We heard you on this topic. And as we discussed the matter over several days, with management and employees, we have decided to change the policy back to a per-pay-period matching contribution.

In the letter, Armstrong also addressed his comments linking the children of employees to the issue. Armstrong wrote:

I made a mistake and I apologize for my comments last week at the town hall when I mentioned specific healthcare examples in trying to explain our decision making process around our employee benefit programs.

That might have been the end of the matter, but now the situation has taken a new turn that promises to further put Armstrong, and his policies, up for criticism.

One of the mothers of the two babies mentioned by Armstrong has stepped forward to offer her side of the story. Her tale not only further humanizes the issue of employee benefits, but highlights exactly how painful Armstrong’s benefits discussion was for many staffers at the company.

In a Slate op-ed published on Sunday, titled, “My Baby and AOL’s Bottom Line,” Deanna Fei, an author, the mother of two, and the wife of an AOL employee, outlines what happened during her recent child birth procedure.

Fei describes the pain caused by the difficult child birth, which was fraught with peril for the baby, but eventually resulted in what is today a healthy baby girl. But it’s when Fei turns her attention toward Armstrong that the true callousness of the CEO’s comments come to bear.

I take issue with how he reduced my daughter to a “distressed baby” who cost the company too much money. How he blamed the saving of her life for his decision to scale back employee benefits. How he exposed the most searing experience of our lives, one that my husband and I still struggle to discuss with anyone but each other, for no other purpose than an absurd justification for corporate cost-cutting.

Later, after citing Armstrong’s $12 million salary, Fei also wrote:

For me and my husband—who have been genuinely grateful for AOL’s benefits, which are actually quite generous—the hardest thing to bear has been the whiff of judgment in Armstrong's statement, as if we selfishly gobbled up an obscenely large slice of the collective health care pie.

This latest episode comes only months after Armstrong was at the center of another flurry of negative attention for the company after he abruptly fired a Patch executive in front of hundreds of employees.

How Armstrong’s reputation will fare after this latest gaffe may not be as important as how AOL’s employees decide to move forward in the wake of yet another hit to the company’s image regarding the treatment of its employees.

---------------------------------------------------------------------------------------------------------------------------------------------

http://www.13wmaz.com/story/news/nation ... s/5345661/

Higher costs 'villain' backfires on AOL CEO
Gabrielle Kratsas, USATODAY 7:05 p.m. EST February 9, 2014

It's been a rough few days for AOL CEO Tim Armstrong and things could get worse. He's ignited a firestorm of protests from employees and others about the company's move to scale back its 401(k) contribution match and blaming it on the company's health care costs associated with the births in 2012 of two "distressed babies" and the higher costs of the Affordable Care Act.

Last week in a town hall meeting with employees, Armstrong announced the company's decision to change the company's 401(k) contribution match to a lump sum at the end of each calendar year instead of paycheck to paycheck.

It meant that workers who left before Dec. 31 were out of luck on a matching contribution for the year. It also meant all workers could no longer invest their 401(k) match throughout the year, avoiding the potential misfortune of investing a lump sum just as stock prices are headed south.

Employees expressed outrage and by Sunday, the company had reversed its change to the 401(k) contribution match and he had apologized for his remarks. But the mother of one of the babies wants a personal apology and posted an article Sunday on Slate.com "My Baby and AOL's Bottom Line," describing the health problems of her daughter born four months premature on Oct. 9, 2012.

Deanna Fei, whose husband works as an editor for AOL, wrote: "I take issue with how ... he blamed the saving of (my daughter's) life for his decision to scale back employee benefits. How he exposed the most searing experience of our lives, one that my husband and I still struggle to discuss with anyone but each other, for no other purpose than an absurd justification for corporate cost-cutting."

Armstrong apologized in an email to employees late Saturday. "On a personal note, I made a mistake and I apologize for my comments last week at the town hall when I mentioned specific health care examples."

"This is commendable," Fei wrote, "but the damage to my family had already done."

Others inside and outside the company seem to agree. The incident was fodder for cable news talk shows throughout the weekend and the outrage went viral on social media.

"I don't get why AOL's CEO Tim Armstrong still has his job today," tweeted Robert Scoble, a startup liaison officer at Rackspace Hosting in San Francisco.

"Is AOL CEO a caveman? Blaming employee pregnancies for money woes?" tweeted Eve Tahmincioglu, director of communications for the Families and Work Institute in New York.

AOL and Armstrong did not immediately respond to a request for comment.

The fear remains that other companies may switch to a year-end lump sum 401(k) match, which can add up to thousands of dollars in lost retirement savings for employees. IBM went to a similar plan in December in a cost-saving measure, creating a backlash among workers and prompting criticism from a few members of the Senate.

It's no small change for the workforce if it catches on, considering 75% of Americans get the bulk of their retirement savings from 401(k) investments.

The practice is perfectly legal but not widespread yet. Just 9% of companies pay out 401(k) matches in lump sums once a year and require workers to work a certain number of hours or be employed on Dec. 31, according to Deloitte.

Here are a few ways it can shrink workers's nest eggs:

1. You leave, you lose. In short, it makes 401(k) balances less portable, which hurts job hoppers. To get the match, AOL had said you have to still be employed at the company on Dec. 31. The downside: Employees who leave the company for another job during the year don't get the match.

"Let's say you leave (a company) on Nov. 30, that means you have worked 11 of 12 months but you will get zero in matching contributions, which is not really fair," says Anthony Sabino, a business and law professor at St. John's University.

2. You miss out on gains. "As a participant, I want the money as soon as possible," says Frank Fantozzi, president and CEO of Planned Financial Services, a Cleveland-based firm that runs retirement plans for 50 companies, all of which deposit 401(k) matches with each paycheck.

"And as an investor," adds Fantozzi, "I want to get the money in the market as soon as I can. Getting the money on Dec. 31 theoretically means you miss out on a year of earnings."

In 2013, for example, when the Standard & Poor's 500 stock index rose 30%, investors that had to wait to get their matching contribution on the last day of the year missed out on huge gains.

3. The market is heading south. Investors might have the misfortune of investing the lump sum when stock prices are moving downward, such as at the start of a market dip, says Andy Busch, editor of The Busch Update.

"If you try to invest it all at once, you run into market-timing issues," he says, adding that a big investment in stocks at the start of the year would have added up to losses as stocks began selling off early in 2014.

USA TODAY's Adam Shell contributed to this story
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Re: Allstate's Greedy Bean Counters Run Amok

Unread postby RatPak11 » Sun Feb 09, 2014 10:12 pm

http://www.nytimes.com/2014/02/10/busin ... iness&_r=0

Facing Criticism After Remarks, AOL Chief Reverses 401(k) Changes
By LESLIE KAUFMANFEB. 9, 2014

Tim Armstrong, the chief executive of AOL, did an about-face on Saturday, reversing an unpopular change in the media company’s employee benefits program and apologizing for publicly singling out two families’ health care issues as a cause of those changes.

AOL had recently altered its 401(k) program, switching its matching payments to one lump sum at year-end instead of throughout the year. The change would have disadvantaged AOL employees, especially those who left the company before Dec. 31. On an internal call last Thursday discussing the new policy, he had attributed the change partly to soaring medical costs associated with two families’ “distressed babies.”

In an email to employees late on Saturday, Mr. Armstrong announced the company’s reversal.

“The leadership team and I listened to your feedback over the last week,” Mr. Armstrong wrote. “We heard you on this topic. And as we discussed the matter over several days, with management and employees, we have decided to change the policy back to a per-pay-period matching contribution.”

Under Mr. Armstrong’s leadership, AOL has transformed itself from an Internet portal to a diversified media company. His strong bets on video advertising, in particular, have improved the company’s financial performance.

But the commotion surrounding AOL’s benefits program was the second time in the last year that Mr. Armstrong has been forced to apologize for his actions or comments during internal meetings.

During a tense meeting in August with employees at AOL’s troubled Patch unit, a collection of local news sites, he fired an employee who was taking photographs of him during the meeting. He apologized four days later. AOL recently sold a majority stake in Patch to Hale Global, a turnaround firm.

In the current episode, Mr. Armstrong came under criticism for what numerous AOL employees thought were insensitive remarks while discussing the company’s increased medical costs. To make his point, he cited specific health care examples.

“We had two AOL-ers that had distressed babies that were born that we paid a million dollars each to make sure those babies were O.K., in general,” he said, according to a transcript of the call provided by an AOL employee.

Numerous AOL employees were displeased that Mr. Armstrong had singled out two co-workers, although without mentioning their names. His comment drew substantial attention and criticism on social media. Deanna Fei, the mother of one of the babies, whose husband works for AOL, wrote a first-person account for the online magazine Slate that described her daughter’s harrowing birth and her own anger over Mr. Armstrong’s remarks.

By Saturday, Mr. Armstrong and AOL management announced that the company was reversing the change to its 401(k) policy.

“I made a mistake,” Mr. Armstrong said on Saturday. “I apologize for my comments last week at the town hall when I mentioned specific health care examples in trying to explain our decision-making process around our employee benefit programs.”

The mea culpa came as Deanna Fei, a novelist and the wife of Peter Goodman, an editor at AOL’s Huffington Post, disclosed that she was the mother of one of the babies that Mr. Armstrong had highlighted. In an essay for the online magazine Slate, Ms. Fei blasted Mr. Armstrong’s remark. (Mr. Goodman worked previously at The New York Times.)

“Let’s set aside the fact that Armstrong — who took home $12 million in pay in 2012 — felt the need to announce a cut in employee benefits on the very day that he touted the best quarterly earnings in years,” she wrote. “For me and my husband — who have been genuinely grateful for AOL’s benefits, which are actually quite generous — the hardest thing to bear has been the whiff of judgment in Armstrong’s statement, as if we selfishly gobbled up an obscenely large slice of the collective health care pie.”

In the article, Ms. Fei described the premature birth of her daughter — she weighed 1 pound, 9 ounces when she was born in October 2012, only five months into a healthy pregnancy.

“Isn’t that the whole point of health insurance?” Ms. Fei wrote, referring to the neonatal intensive care her daughter received. “Having her very existence used as a scapegoat for cutting corporate benefits was one indignity too many.”
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