As announced in February 2012, General Motors provides all salaried employees the option to receive their accrued pension benefits in a lump sum payment upon retirement. In addition, GM presented offers to certain salaried retirees for a buyout of their remaining pension plan benefits. The offer was extended to approximately 42,000 GM retirees.

Mainstay Capital Management is committed to assisting our clients and others in determining which pension payment option is best for their individual situation. We have conducted several workshops on the pension payment options for retirees of General Motors, Ford, Visteon, NCR, and other companies. These workshops have generated many questions. Below is a list of questions that were brought to us by our clients, as well as others, through our workshops, webinars, and other discussions.

Information contained herein has been compiled from sources believed to be reliable, but its accuracy and completeness are not guaranteed and Mainstay Capital Management assumes no responsibility for errors or omissions.


As an active GM employee, will I need to make an election regarding the lump sum distribution option immediately following retirement?

GM retirees can choose to take a lump sum distribution at the time of retirement or postpone their pension election until a later date. The lump sum distribution continues to be an option for GM retirees until they elect to receive a monthly pension payment.

Once I receive the lump sum distribution payment, can I switch to receiving monthly payments if I change my mind?

No. Once a lump sum distribution has been paid (or monthly benefits commence) you cannot revoke or change your election.

Do I have the ability to take a lump sum distribution while I am an active employee?

GM salaried employees will not have an option to take a lump sum distribution of their pension benefit until the time of retirement.

What are the tax implications of taking a lump sum distribution?

There are no tax implications for those taking a lump sum distribution and rolling it into an IRA or another qualified plan that accepts rollover distributions. However, if the lump sum distribution is taken and rolled into a qualified plan at age 70½ or older, the distribution will be used in calculating any future Required Minimum Distributions (RMDs). Taken as cash, the lump sum is fully taxable as ordinary income.

Can you address the different risks associated with electing a lump sum pension payout?

Please review our "Pension Lump Sum Special Report" for information on investment, tax, and longevity risk due to inflation, among others.

At GM, if I retired under T&PD (Total and Permanent Disability) do I have the option to take a lump sum distribution from my pension?

You have the lump sum distribution option available to you on the first of the month following your Normal Retirement Date. It is not an available option to you prior to this date.

Is a lump sum distribution available for the Saturn PCRP or Saab plans?

No. The lump sum distribution option is not available under for these plans at this time.

For those GM retirees whose pension was transferred to Prudential, what is the maximum amount of pension benefit guaranteed should Prudential fail?

The group annuity contract that GM purchased from Prudential is an "allocated" annuity contract. Meaning, each annuitant will be covered individually rather than all annuitants covered as a group. The level that each annuitant will be covered is dependent on their state of residence. Michigan residents are covered up to $250,000. Please review the list of state liability limits as well as information regarding protection.

Important Consumer Disclosures

Mainstay Capital Management, LLC is an investment advisor registered with the Securities and Exchange Commission. Due to various state regulations and filing requirements, Mainstay and its representatives may only provide investment advisory services in those states in which it is first appropriately registered or otherwise exempt or excluded from registration requirements. The purpose of this website is to provide the public with general information about the services offered by our investment management firm. Mainstay does not render personalized investment advice or services or effect, or attempt to effect any securities transactions, on this website. Our firm continuously monitors its filing requirements in all states, and will provide individualized advisory services only in accordance with various state regulations. Mainstay does not make any representations or warranties as to the accuracy, completeness, or relevance of any information prepared by any unaffiliated third party provider, whether linked to Mainstay's website or incorporated herein. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.


Disclosure Information - Rankings and Awards

Barron's Magazine - Top 100 Independent Wealth Advisors

According to Barron’s: The rankings are based on data provided by individual advisors and their firms. Advisor data is confirmed via regulatory databases, cross‐checks with securities firms and conversations with individual advisors. The formula Barron’s uses to rank advisors is proprietary. It has three major components: assets managed, revenue produced and quality of practice. Investment returns are not a component of the rankings because an advisor’s returns are dictated largely by the risk tolerance of clients. The quality of practice component includes an evaluation of each advisor’s regulatory record. The data is based on one fiscal year (7/1/22 - 6/30/23) and appeared in Barron’s on 9/18/23.

Schwab IMPACT Awards

The Charles Schwab & Co., Inc.’s IMPACT Awards® program recognizes excellence in the business of independent financial advice. Nominees are evaluated and selected by a panel of prominent leaders from both the business world and the financial services industry. Mainstay Capital Management does use Charles Schwab to custody certain client assets, however there was no direct compensation provided to be nominated for this award. Mainstay Capital Management received this annual award on November 15, 2017.