• Feb 16, 2012
General Motors will freeze the defined benefit pension plans of 19,000 workers on Sept. 30, 2012, shifting them instead into 401(k) plans. Affected workers were all hired before 2001 and are salaried employees. Hourly workers are not affected by this change.

Because the retirement plans will be frozen, contributions will no longer be accepted into them; however, any funds contributed prior to that date will remain intact and will be paid out upon the worker's retirement.

GM has hired around 7,000 salaried employees since 2001, but these workers will not be affected because they were entered into a 401(k) plan right off the bat in lieu of the old pension program. CNN reports GM made the switch to shift investment liabilities from the company its employees.

General Motors has announced its full-year earnings for 2011, and by nearly all measures performed extremely well. Apparently, though, its old pension plan remains 88-percent underfunded, and it remains to be seen how the company will deal with that issue.


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  • 23 Comments
      Basil Exposition
      • 2 Years Ago
      About time.
      • 2 Years Ago
      [blocked]
        Ross DC
        • 2 Years Ago
        My small IT consulting company I work for gives dollar to a dollar up to max, yes MAX of $17k. I even called and verified that it was not a typo when I initially received the offer letter from them over 2 years ago.
        caddy-v
        • 2 Years Ago
        .25 on the dollar? Even McDonalds pension is better than that. That's embarrasing.
          • 2 Years Ago
          @caddy-v
          [blocked]
      cmcilroy35
      • 2 Years Ago
      I love my 401k. It allows me to control how much I save, and into what investments I want. Plus if I leave the company, I get to take it with me. I'm a big boy and enjoy being in control of my own savings.
      ojfltx
      • 2 Years Ago
      This is something I can get behind. Next, the government itself.
        Oscar
        • 2 Years Ago
        @ojfltx
        Actually, at the federal level it largely is already under the FERS program...has been for a number of years. The old system, CSRS, is probably the lucrative system you're thinking of.
        Radioactive Flea
        • 2 Years Ago
        @ojfltx
        Perhaps you sould worry about what you have.
      Doug
      • 2 Years Ago
      Hourly workers are not affected by this change. Notice the UAW sees that define benefit pension plans aren't economically sustainable, but they kept them anyway for themselves.
      • 2 Years Ago
      [blocked]
        BLS
        • 2 Years Ago
        It isn't possible to be 88% underfunded. They are funded at 88% of the obligation. That is a reasonable place to be plenty of money to pay current benefits and plenty of time to put the rest of the money needed into the plan.
      • 2 Years Ago
      [blocked]
        montoym
        • 2 Years Ago
        Virtually every other private industry has switched over to 401k's because they make much more sense financially. It's only the public sector and industries with heavy union involvement that have desperately tried to keep their defined benefit packages despite the huge money hole that exists in virtually every one of them. The employees shouldn't be affected greatly. Those who have been a part of the defined benefit (pension) plans will keep the benefits they've earned to this point and their future obligations will be a part of the defined contribution 401k's. New employees will only have the 401k's. Basically, a similar situation to what the majority of us deal with. This is also the way the Social Security situation should be and is planned to be managed. Changes made to the plans will not affect those of a certain age level (say 50yrs or so) and will only affect those younger and it will be a gradual change as well. But, whenever changes to SS are brought up, the loudest and most vigorous opposition to those changes comes from those who will be least affected, those who are retired or close to retirement. I blame the AARP for a lot of that.
        Noah
        • 2 Years Ago
        As employees of GM, the only thing they should care about is A. How to do their job better B. How to make the company more money. They should feel absolutely fantastic the company who employs them are making ground towards financial solvency.
        David MacGillis
        • 2 Years Ago
        The UAW should step up and do the same.
      XEVIOUS
      • 2 Years Ago
      Too bad all those old money draining top execs will come away with filled pockets after theyve done nothing more than drag the company down into bancrupy. Lets not forget the original GM did die. Not furthering technology, of factory tooling, keeping with antiquated products, designs and above all else business models. Cant believe GM has even considered hiring the same old guys again! These so called Car-Zar's. Please!
      tributetodrive
      • 2 Years Ago
      about time...
      Mary Miller
      • 2 Years Ago
      its a right thing that most penny stocks trade is done in the over the counter market, such as online,rather than through the larger stock exchanges.http://www.xtremepicks.com/
      Raymond
      • 2 Years Ago
      It does not remain to be seen they have already laid out a plain to fully fund the plan by 2018 or something like that I can not remember but they published reports all about it. Why would Autoblog say it remain to be seen.....??????
      Sandy OHannon
      • 2 Years Ago
      When GM announced their Pension Buyout Plan on June 1, July 20 seemed far enough away. Now that we're in July, that decision deadline might be feeling a little too close for comfort. Understanding the consequences of the three decisions available to select retirees is a lot of work. In fact, you may have found the phrases and terms require some sort of degree to fully understand. It's okay to be feeling this way; that's exactly why seeking the advice of a professional financial planner has been encouraged. The planners at LJPR, LLC of Troy, MI have years of experience assisting retirees like you navigate the muddy waters of pension plan decisions. They have created an informative video specific to the GM pension buyout options as a service to all GM retirees. You can watch it by clicking http://youtu.be/32ZRne7AoTQ. You still have time to make an educated decision about your role in the GM Pension Buyout Plan.
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