Benefits February 15, 2012

GM Freezing Salaried Worker Pension

February 15, 2012 (PLANSPONSOR.com) - General Motors Co. plans to freeze its U.S. pension plan for longtime white-collar workers and give all salaried employees annual bonuses but not pay raises, officials announced.
Reported by

The Detroit-based automaker said roughly 19,000 salaried workers hired before 2001 will move from a traditional pension with guaranteed payments to a 401(k) plan with contributions based on salary and bonuses, the Washington Post reports. Employees hired after 2001, which represent about 30% of the company’s salaried workforce, already are in that defined contribution plan.  

The changes take effect October 1, and workers will keep all pension benefits they have already accrued, officials said.  

According to the news report, GM said it would offer bonuses to all 26,000 salaried employees and release the amounts when it announces quarterly and full-year earnings. The company is expected to post a 2011 net profit of around $8 billion — the best in its 103-year history.  

GM Vice President of Global Human Sesources Cindy Brinkley said the changes are geared toward increasing profitability and reducing risk.

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