Employees at The Orange County Register received an unsettling email from corporate headquarters this year. The owner of the newspaper, Freedom Communications, was writing to request workers’ consent to take out life insurance policies on them.
But the beneficiary of each policy would not be the survivors or estate of the insured employee, but the Freedom Communications pension plan. Reporters and editors resisted, uncomfortable with the notion that the company might profit from their deaths.
Funny how they miss the point.
What this does is increase the perverse incentive a pension fund already has in preferring you to die right away. Not only do they avoid paying out any pension, they also get the insurance policy pay-out.
So, how would they go about killing you early? Well, they have to invest that money they are holding somewhere. It’s just a matter of being selective where they invest. Their profit from that investment may not come from dividends after all…