Farewell to defined-benefit pensions, General Motors editionFebruary 15th, 2012 at 7:47 pm by Ted Nesi under Nesi's Notes
The Detroit News reports:
General Motors has the largest pension obligation of any company in the United States, and the automaker had been hinting for months that it needed to do something to reduce the risk that liability posed to its financial strength. …
GM, too, eliminated those pensions for salaried employees hired after Jan. 1, 2001. Those people — who make up about 30 percent of GM’s U.S. salaried workforce — already have defined-contribution, or 401(k) plans, instead.
Starting Oct. 1, the approximately 19,000 U.S. salaried employees hired before 2001 will be moved to that plan as well. However, they will retain the traditional pension benefits they earned up to that date.
GM is also offering retirees the option of taking those benefits as a one-time lump-sum payment when they leave the company.
As a reader pointed out to me in passing this item along, GM’s United Auto Workers union took a major ownership stake in the automaker during its bankruptcy. (Technically, the owner is a UAW retiree health trust.) That makes the corporate politics of GM’s decisions all the more interesting.