According to a filing with the Securities and Exchange Commission, State Street Bank and Trust, who serves as investment manager and independent fiduciary of the GM Common Stock Fund, on March 31 “commenced a selling program” of the stock holdings and began investing the proceeds in fixed-income and money market instruments. The selling program was expected to conclude today, according to the filing, which acknowledged that the fund “is no longer “pursuing its stated investment strategy, and its returns are no longer correlated to the performance of GM Common Stock.”
GM had earlier announced that it was no longer purchasing new shares in the fund as of September 30, 2008 (see GM 401(k) Stock Purchases Still Stalled
According to the SEC filing, the plan trustee is “specifically authorized” to sell shares of GM common stock if there are “serious questions concerning” the company’s short-term viability or if “there is no possibility in the short-term of recouping any substantial proceeds from the sale of stock in bankruptcy proceedings.” The filing said that “State Street made the determination that this standard had been met due to the economic climate and the circumstances surrounding GM’s business.”
On May 29, the GM Stock fund will be discontinued, and removed as a plan option – and participants are being encouraged to transfer those balances into another fund prior to that date. For participants that do not make an election, their accounts will be transferred into the applicable qualified default investment alternative (QDIA) for the respective plan(s), either the Pyramis Strategic Balanced Commingled Pool option (for the Savings-Stock Purchase Program) or the Pyramis Active Lifestyle Commingled Pool option with a target retirement date closest to the year after the individual participant will attain age 65 for the Personal Savings Plan.
The inability to effect an in-kind withdrawal from the stock fund was suspended at the end of the day on April 23. According to the Detroit Free Press, there are currently about 30,000 participants in the GM employee common stock fund.
« Ohio 529 Plans Earn Best and Worst Ranking