Retirement Heist: how companies plunder and profit from the nest eggs of American workers

“I thought when you retired, that was it,” Craven said. “How can they come to me all these years later and tell me this?” Craven, a widower with macular degeneration who is nearly blind, had a friend read him the letter, which said that a company called Foundation Coal Corp. should have been paying Craven’s pension, and directed him to write to Foundation Coal, in Linthicum Heights, Maryland, for information about his benefit. In the meantime, he needed to begin repaying the debt to BP. “Please accept our apologies for any inconvenience this may have caused,” the letter concluded.

Craven had never heard of Foundation Coal. He’d earned the pension working for Cyprus Mines, a copper-and-minerals company, and had bounced among several mines in Arizona and Nevada over the years. He didn’t know which company bought what; he only knew that his check had been coming from BP.

He was still thinking about this dilemma two weeks later when a second letter from Fidelity Investments arrived, reiterating the demand for repayment. This letter, like the preceding one, was delayed because it had been sent to his prior address in Kingman, Arizona. This second letter noted that Craven had originally earned his pension under the Amoco pension plan, which had merged with the BP plan, “but the liability for that benefit and the associated pension assets were subsequently transferred to Cyprus Minerals in 1985 . . . and therefore not payable under the BP pension plan. This letter didn’t mention Foundation Coal, but directed him to write to Fidelity Investments in Cincinnati or call a toll-free number. Craven asked his friend Ruth Emley, a widow from Nevada he’d met online, to make the call. Ruth, who, like Craven, was seventy-nine at the time, called but got an automated system and was put on eternal hold. “We never got to talk to anyone there,” Ruth said.

This second letter told Craven that if he disagreed with the demand for payment, he should send a claim, “stating specific grounds upon which your request for review is based,” along with supporting documents, to BP’s claims-and-appeals coordinator in La Cañada Flintridge, California. By the time he got the second letter, Craven had been without his pension for three months.

So who should have been paying Craven’s pension? Even if Craven had been able to see, his computer was broken, and his research skills were limited. His math wasn’t so great, either: He hadn’t noticed that eighteen years of monthly payments of $346 added up to a lot more than the $18,363 Fidelity’s letter was demanding. Like many retirees, he had not followed the mergers-and-acquisitions activity of his former employer, and kept few records (or, in his case, no records, other than canceled checks). His companion, Ruth, started digging through old boxes of canceled checks and looked in the Yellow Pages under “Senior,” hoping to find someone to help.

Though Craven was a little hazy on his employment history, this is what records later showed. He first went to work at a company called Cyprus Mines in 1962 and left in 1979, the year Amoco Corp. bought the company. He returned to Cyprus two years later and retired in 1985. The year he retired, Amoco spun off Cyprus as an independent company called Cyprus Minerals, transferring to it the pension liabilities of current employees. Cyprus Minerals began paying Craven a pension for his last five years of work, $52 a month. In 1993, Cyprus Minerals Co. merged with Amax, forming Cyprus Amax Minerals Co. Phelps Dodge Corp. acquired Cyprus Amax Minerals Co. in 1999 and continued paying the small pension. Meanwhile, Craven also had begun receiving a second monthly pension for his earlier work stint, for $348. Amoco paid this, and when Amoco became part of British Petroleum in the late 1990s, the combined company paid this second pension. Got it?

By the time BP acquired the portfolio of old miners, it had already passed through so many hands that the pedigrees of many of the pensions were in question. Benefits audits rarely turn up any mistakes in the retirees’ favor. As it turned out, though, there was a mistake with Craven’s pension: Following a second review of the paperwork, prompted by a reporter’s call to BP, Fidelity concluded that BP was responsible for Craven’s pension after all. It sent him a letter saying it would resume paying his pension and he would receive his back payments, with interest. Unfortunately, most retirees don’t have reporters interested in figuring out how much pension money they’re owed.

LUCENT’S SPIN JOB