Following details on GM pensions
Q&A: Following details on GM pensions
QUESTION: I had understood that the GM salaried pension was funded at 95% as of Jan. 1, 2009. It should be noted that the salaried and union pension funds are two separate entities that stand on their own. Why are we hearing more talk about the Pension Benefit Guaranty Corp.?
ANSWER: There are different measures used to calculate pension funding. According to the method used by the Pension Benefit Guaranty Corp. for determining liabilities when a plan is terminated and turned over to the PBGC, General Motors Corp. pension plans had an aggregate shortfall of $20 billion in late November. The PBGC does not have stand-alone information about the salaried plan at this time, but asserts that both the hourly and salaried plans are underfunded.
The key point, however, is that the PBGC does not expect the GM plans to terminate during this bankruptcy filing.