Severance Insurance

Talk about closing the barn door after the horse is out! What about those millions of foreclosures that have already happened? What about those families? And oh by the way, Bush's plan completely locks out those folks who are already screwed and are running more than 30 days late now or have been more than 60 days late over the last year. What about those families? What this plan does is to give help to those who don't need the help (by virtue of their ability to stay on top of their exploding interest rate)? It's kind of like giving tax breaks to the top 10% income earners.

Corporate America and George Bush have a lot in common. The little guy is merely currency to be used and then forgotten. Bush used them when he got re-elected, yet he's turning his back on them now. Corporate America uses workers' skills until they aren't need any longer and then sends them on their way.

It is time for workers to be insured against what is now becoming the liklihood of being fired for no cause. Workers have insisted on having access to disability insurance, and the average worker now has access to group long term disability. And the government has even carved out a tax advantage for those poor souls who find themselves in the position of having to file a claim for and collect disability...no federal income tax on their benefits as long as the worked was W2'd the premium amount. So the precedent is there...corporations and government providing an insured safety net for workers who lose their jobs because of accident or illness (not their fault). So, what's so different about being fired just because the corporation has decided it just doesn't need you any more (not your fault)? Not much as far as I am concerned.

It's time to press hard for severance insurance. Talk to your HR department. E-mail your Congressman and your Senator. E-mail Senator Kennedy at www.kennedy.gov and ask him as the ranking member of the Committee on Health, Education, Labor and Pensions what he thinks.




willy

Severance Insurance

So, I'm spending my usual too many hours sleuthing out what I think is an intelligent approach to severance, when I come across a Stamford, CT based company called Transition Services, Inc. http://www.tsisolution.com/ . They position themselves as providers of "advanced severance management". Clearly, they are not in playing in the insurance space, but it is clear that they understand that there are ways to save on the costs associated with severance, using the same mechanisms that I have already identified. And oh by the way, their CEO is a guy with insurance background (AIG and CNA) and their COO comes out of the insurance brokerage universe (Marsh, Inc.) This all makes sense, because their parent company is an insurance company called RVI Guaranty Company. So, don't you just think they just might be "aware" of severance insurance...maybe even in bed with the severance insurance guys?


willy

Severance Plan...Severance Package

Give some thought to the terms severance plan and severance package. Who's plan? What package? It sure isn't the plan of the employee who just got fired. It's the plan the corporation has for buying off a fired employee's promise not to sue. The term severance package just goes to show that a corporation is trying to deal with their firing an employee with a neat and clean strategy, again to buy off the employee. If you think a corporation is doing it out of some sense of loyalty, you're either super crazy or super naive. Get with it folks, severance has nothing to do with taking care of an employee and everything to do with managing their reaction to getting fired.

Severance Insurance

It must mean something, because www.severanceinsurance.com is now in the top spot when you Google "severance insurance", and I'm pissed, because up until now good ol' willy has been up there. So who's looking at the site? It sure doesn't look particularly special. But it does make a point and get all of the information across. and given its position on Google more than a few people are looking at it.

If nothing else, the severance insurance guys have got themselves on the map. So whyt haven't we heard, or better yet why can't I find anything material about it other than on their website? Maybe the reason it is flying under the radar is that corporations are using their captives as a way of securing the insurance so it doesn't hit the obvious radar screens. I'll bet I'm pretty close on that one...like I have been on a few other things.

Good on me! The problem is I still haven't found a job and that sucks.

willy

Severance Insurance

Things are a shakin'! Word on the street is that the severance insurance guys are about to make some announcement. Big placement? Fresh capital? Strategic alliance? Kissing corportions off and casting their lot with the folks who have gotten fired? I haven't a clue. I guess we'll just have to wait and see.

The one thing that I do have a clue about is this economy is in free fall (whether acknowledged by the pundits, or not) and going to generate a whole lot of folks who get fired. Whether caused by the global economy, the declining dollar, outsourcing, technology...you name it, real full time jobs held by real people are at risk.

I've talked about the similarities with disability insurance. The most obvious similarity is that whether injured, ill or fired they all have lost their jobs through no fault of their own. The disabled have all sorts of options. I still can't figure out why the displaced have none.

willy

Severance Insurance

On October 29th I got real cocky and started talking about what I called engineered severance. I acknowledged that it wasn't insurance. But what a weekend's worth of modeling has shown me is that I really can take most of the strategies that the insurance guys are using and use them to extend severance benefits...and not insignificantly. Rather than call it engineered severance which might freak soime people out, let's call it extended severance, because that is basically what it is.

Stick with me, and I'll figure out how to best explain how it works to you all.


willy

Severance Insurance

No question that Citi's and Merrill's CEO's deserve to lose their jobs. But what about the Boards of Directors? What were they doing. What reports were they reading? Why didn't they challenge management on the disproportionate portfolio growth in sub-prime mortgages?

What's really interesting to me is that there doesn't seem to be a lot of discussion beyond the reality that banks are taking hits to their earnings and will probably take more. No one seems to be focused on the overall impact that the increased number of foreclosed houses is going to have on the real estate market and the prices that these houses are going to have to be listed for in order to get them off the banks' balance sheets. It's already happening. My daughter pointed out a house over the weekend in one of suburban Boston's tonier areas that was on the market for $659k. A year ago that house would have been on the market for something above $850.

I've got to think that recession follows, and when that happens more jobs are going to be lost.


willy