Editor's note: This article is adapted from "Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of American Workers," by Ellen E. Schultz, published by Portfolio/Penguin for Penguin Group (USA). Used by permission.

Gary Skarka had a rewarding middle-management career at AT&T (T, news), along with some of the best retirement benefits in the country. But instead of enjoying a comfortable retirement, he is working as a security guard. "I know I will have to work at menial jobs until I die," he says.

Skarka's financial predicament isn't the result of investment losses or runaway spending. He is among millions of Americans who encountered an unexpected risk to their retirement: their employers.

Over the past two decades, companies have cut pensions, slashed retiree health coverage and killed other benefits. Many have reduced their contributions to 401k's as well.

Companies say they are the victims of a "perfect storm" of unforeseen forces: an aging work force, market turmoil and adverse interest rates. Certainly, these all contributed to the retirement crisis. But employers have played a big and hidden role in the death spiral of pensions and retiree benefits as well.

Workers with a significant portion of their net worth tied up in employer-sponsored retirement plans should be aware of the hidden risks they face. Here are some to watch out for:

Tapping pension plans

Just over a decade ago, pension plans had a quarter of a trillion dollars in surplus assets. Today, they are collectively underfunded by about 20%. Market losses and historically low interest rates erased a lot of this, but much of the damage was self-inflicted.

Verizon Communications (VZ, news) predecessor Bell Atlantic, in a typical move, used more than $3 billion of its pension assets to finance retirement incentives for thousands of managers. Similar moves enabled companies to shed hundreds of thousands of older employees without dipping into corporate cash. Employers also began using pension-plan assets to pay for the health benefits they promised retirees.

These types of moves helped drain Verizon's pension surplus, so when the market cratered in 2008, there was no surplus left to cushion the blow. The plan, whose surplus peaked in the late 1990s, is now $3.4 billion in the hole. A Verizon spokesman says the amount of pension assets used to make incentive payments is "immaterial."

Another issue: In the swirl of mergers and acquisitions in the 1990s and 2000s, many companies "monetized" -- that is, sold -- billions of dollars' worth of pension assets. A common technique was to sell a unit and transfer workers and retirees to the buyer, along with more pension money than necessary to cover the benefits owed them. The buyer might pay 70 cents on the dollar for the surplus, leaving the seller with a less-well-funded plan -- but also with a lot of cash that the seller wouldn't otherwise have received.

What to watch for: In annual reports, companies usually disclose their use of pension assets for severance-type pay and the amounts they transfer from pension plans to pay retiree medical benefits. But it can be virtually impossible to determine whether pension money changed hands in mergers and acquisitions.

Boosting income

Cutting benefits provided employers with an additional windfall: income. Because the benefits are recorded as debts on a company's books, reducing the debt generates paper gains, which are added to operating income right along with income from selling hardware or trucks.

Thanks to these accounting rules, which all companies adopted in the late 1980s, retiree plans have become cookie jars of potential earnings enhancements: Essentially every dollar owed to current and future retirees -- for pensions, health care, dental, death benefits or disability -- is a potential dollar of income to a company.

What to watch for: Employers can raise or lower their retiree obligations by billions simply by changing key assumptions, such as "discount rates" and "estimated returns." If your employer announces it is cutting pension or retiree health benefits because costs are "spiraling," ask whether the company merely changed the assumptions in the plan to justify the cuts.