Biggles of 266
1st Level Red Feather
- Joined
- Apr 26, 2001
- Messages
- 1,126
- Points
- 36
To Wal-Mart it was just a tax loophole. To Vicki Rice it is a heartless revelation in a year of disillusionment over corporate tactics.
After her husband, an assistant store manager in New Hampshire, died of a heart attack, she discovered the retail giant had bought life insurance on thousands of employees, including her husband, and named itself the beneficiary.
Wal-Mart pocketed at least $US300,000 when her husband died, while Ms Rice and her two children got nothing.
In a case that is expected to lead to many others, Ms Rice is suing Wal-Mart, alleging that the money should have gone to her - not the company.
"It just galls me that Wal-Mart was named the No 1 Fortune 500 company," said Ms Rice, a former Wal-Mart employee. "And they helped themselves get there by collecting $US300,000 on my husband's death."
Wal-Mart is one of hundreds of large companies that took out life insurance policies on their employees in the past decade after an easing of regulations
in some states permitted the practice.
Companies poured millions into the policies, quickly seizing upon them as lucrative tax shelters. Corporations were able to borrow against the policies and write off the interest they paid on the loans. In some cases, including Wal-Mart, the companies continued to allow employees to buy their own life insurance and collect the benefits.
Wal-Mart officials say the firm took out the policies on employees because the death of each was a costly loss for it.
"It is our contention that we did not benefit from the death of our associates," a spokesman for the company said.
"We had a considerable investment in these employees, and we were ahead if they continued to live, particularly the man in the New Hampshire case. He had been given quite a bit of training and gained experiences that cannot be duplicated without costs."
Wal-Mart says it ultimately lost an estimated $US150 million on the policies and the company is suing the insurers, claiming they did not advise it that the policies might not hold up under some states' laws.
The company also says that every employee was notified of the life insurance coverage in an employee handbook.
But Ms Rice said neither she nor her husband, who died in 1999, realised the company had taken out a life insurance policy on him. And she says she has lost faith in a company that she once admired as a corporate rock.
"It doesn't care about its employees. It's all about greed ... it's nothing like the apple pie image they put in their ads."
After her husband, an assistant store manager in New Hampshire, died of a heart attack, she discovered the retail giant had bought life insurance on thousands of employees, including her husband, and named itself the beneficiary.
Wal-Mart pocketed at least $US300,000 when her husband died, while Ms Rice and her two children got nothing.
In a case that is expected to lead to many others, Ms Rice is suing Wal-Mart, alleging that the money should have gone to her - not the company.
"It just galls me that Wal-Mart was named the No 1 Fortune 500 company," said Ms Rice, a former Wal-Mart employee. "And they helped themselves get there by collecting $US300,000 on my husband's death."
Wal-Mart is one of hundreds of large companies that took out life insurance policies on their employees in the past decade after an easing of regulations
in some states permitted the practice.
Companies poured millions into the policies, quickly seizing upon them as lucrative tax shelters. Corporations were able to borrow against the policies and write off the interest they paid on the loans. In some cases, including Wal-Mart, the companies continued to allow employees to buy their own life insurance and collect the benefits.
Wal-Mart officials say the firm took out the policies on employees because the death of each was a costly loss for it.
"It is our contention that we did not benefit from the death of our associates," a spokesman for the company said.
"We had a considerable investment in these employees, and we were ahead if they continued to live, particularly the man in the New Hampshire case. He had been given quite a bit of training and gained experiences that cannot be duplicated without costs."
Wal-Mart says it ultimately lost an estimated $US150 million on the policies and the company is suing the insurers, claiming they did not advise it that the policies might not hold up under some states' laws.
The company also says that every employee was notified of the life insurance coverage in an employee handbook.
But Ms Rice said neither she nor her husband, who died in 1999, realised the company had taken out a life insurance policy on him. And she says she has lost faith in a company that she once admired as a corporate rock.
"It doesn't care about its employees. It's all about greed ... it's nothing like the apple pie image they put in their ads."
