Large companies have an obligation to their shareholders, but what happens when that puts them at odds with their obligation to the families of fallen soldiers?

• Records obtained through the Freedom of Information Act show that for the past 10 years, Prudential Financial has been withholding lump-sum death benefits from the families of fallen U.S. soldiers.
• In a verbal agreement with a Veterans Administration director in 1999, Prudential was given permission to issue “retained-asset accounts” to survivors rather than pay out the full amount due to them. According to original contract terms set with the company in 1965, verbal agreements aren’t enough to stand up in court.
• Prudential keeps those “retained assets” in its corporate general account, where they have earned the company as much as $500 million in interest. These funds are not insured by the FDIC, meaning that if the company went bankrupt, all of the money due to surviving families would disappear.

Facts & Figures

• Prudential pays survivors an interest rate of 0.5% on money held in retained-asset accounts
• These retained-asset accounts have earned Prudential a profit of 4.2%
• 90% of survivors request lump sum benefits from Prudential
• In June 2010, Prudential had $662 million in money due to survivors in its general account

Best Quote

“Until today I actually believed that the families of our fallen heroes got a check for the full amount of their benefits. This came as news to me.” – U.S. Secretary of Defense Robert Gates

Tags: benefits, contracts, military, Prudential, retained assets, soldiers, VA, veterans