General Motors has announced additional changes to its pension plan that will impact 118,000 salaried retirees, with 42,000 being offered a lump sum payment option. These GM retirees must choose among three options by July 20, 2012.
GM salaried retirees who retired between October 1, 1997 and December 1, 2011 are being provided a lump sum payment offer of their pension benefits. These retirees may:
- Take their pension benefit as a lump sum payment
- Continue to receive their current monthly pension payment (payable by Prudential Insurance)
- Choose a new form of their monthly pension benefit based on the lump sum valuation
Retirees not offered a lump sum will continue to receive their current monthly pension benefit, which will be paid by Prudential Insurance after GM’s current pension program is terminated. GM previously announced that current employees will have the lump sum pension payment option available to them at retirement, effective July 1, 2012.
By taking advantage of the lump sum pension payment option, current and future GM retirees may reduce many potential pension risks including longevity risk due to inflation, tax risk, and mortality risk. Most importantly for current employees, at retirement it will completely eliminate "PBGC risk" - the risk that monthly pension payments are someday reduced by the Pension Benefit Guaranty Corporation.
Visit our “In The News” section to review the articles discussing pension lump sum payments or call Mainstay toll-free at 1‑866‑444‑6246 to discuss your personal situation. If you are a member of a GM retiree group that is impacted by this change, and would like to inquire about or schedule a free educational workshop regarding pension payment options and other retirement planning topics, contact us soon as the deadline to make a decision on these options is fast approaching.