Filed under: Government/Legal, Hirings/Firings/Layoffs, GM, Earnings/Financials
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.
GM takes final step to eliminate pension plans, switch entirely to 401Ks originally appeared on Autoblog on Thu, 16 Feb 2012 16:00:00 EST. Please see our terms for use of feeds.
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