Sunday, June 17, 2012

GM to 24 percent of the US pension liability

DETROIT - General Motors co. some U.S. employed pensioners offer a lump sum pension buyout as part of a series of measures announced, on Friday, which is cut to 24 percent of the U.S. pension obligations.

The largest U.S. automakers offer one-time lump-sum payments to around 42,000 pensioners and their surviving beneficiary. You must make a decision by July 20.

Also a group contract will purchase annuity from Prudential, GM, remaining employed pensioners and those choosing the lump sum not to manage the numbers now and future benefit payments GM.

The two movements are cut U.S. $26 billion of GM pension obligations and 118,000 its U.S. pensioners affect. GM is a major concern for investors of nearly $109 billion and is one of the few issues management remains unchanged, while the Obama bailout of GM in 2009.

"We feel, it is important that both these obligations to mitigate future growth as we have been doing and where today the actions actually reduce the obligation," Chief Financial Officer Dan Ammann said during a conference call.

The responsibility for the management of pensions for pensioners relieve the amendments to GM. There is no change to the pension underfunding of the plans, the GM of its represented by United Auto workers offering workers.

The pension changes not employed pensioners are entitled to pension, health care, life insurance and a vehicle discount.

Both transactions are completed expected to end of this year. GM said that between $3.5 billion and $4.5 billion in bar to acquire it, the Group Pension Fund contract and improvement of the funded status of pension plan for current employees paid.

"The company financial flexibility improved as we are less exposed to the financial volatility and calls for cash, which, we experienced our flexible in the past, which in turn improve have providing money for uses alternative", Ammann said.

A growing concern for decades as U.S. automakers share to foreign automakers in their home an albatross for the US industry with the sector downturn was five years ago lost pension costs.

(C) Copyright Thomson Reuters 2012

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