GM retirees: How safe is your pension?

June 29, 2009

GM retirees: How safe is your pension?

Susan Tompor
Detroit Free Press

With General Motors Corp. in bankruptcy, thousands of its retirees are understandably concerned about their pensions and benefits. Here are some questions and answers:

• What happens to my pension? Or more precisely for some, my father’s pension?

• It’s not a small question. The Detroit automaker has 493,000 U.S. hourly and salaried retirees and surviving spouses.

The good news now is that GM is not terminating its pension plan. GM said the company does not expect any immediate changes to the qualified pension plans and general health and life insurance benefits that GM provides to retirees, survivors and beneficiaries. However, hourly retirees will lose their dental and vision insurance as of July 1 as part of a new contract negotiated with the United Auto Workers union.

• Which plans are protected?

• Qualified plans, such as the GM Hourly-Rate Employees Pension Plan and GM Retirement Program for Salaried Employees.

• Who would see cuts?

• GM said it is too soon to know how benefits for retirees of U.S. operations may be affected after the new GM is in place. However, the company does anticipate a reduction of certain benefits in the future. GM said the reduction will impact salaried retiree life insurance, salaried retiree health care, executive non-qualified pension, executive retiree life insurance and non-UAW hourly life insurance.

• Who do you call if you have questions?

• GM retirees can call the benefits and service center at (800) 489-4646.

• What could happen in the long run?

• Retirees need GM to be a stronger, healthier new GM in the years ahead to avoid any need for GM to turn over its pension plan to the Pension Benefit Guaranty Corp., which protects basic benefits.

• What happens if a plan is taken over by the PBGC?

• Some retirees wouldn’t notice any change but others could see a smaller payout.

Susan Tompor is the personal finance columnist for the Detroit Free Press.

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