General Motors is moving to reduce the company's pension costs by $26 billion. The automaker is offering around 42,000 of its salaried retirees and surviving beneficiaries a one-time lump-sum payment in lieu of their current monthly benefit. In addition, GM plans to shift its salaried pensions to Prudential Insurance Co. of America. All told, the move will cost the manufacturer between $3.5 billion and $4.5 billion, including funding the plan and purchasing an annuity contract from Prudential. G
Gm Pension Plan
General Motors continues to use its newfound cash in a manner that aims to please its accounting department. After receiving a sizable monetary infusion thanks to the largest IPO in U.S. history, GM is now focused on putting that money to good use. Its Korean subsidiary, GM-Daewoo, recently paid off a $1 billion credit that was owed, and today, The General is pouring $4 billion much needed greenbacks into its pension fund deposit.
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