[A-List] GM shifts pension burden to workers

["Charles Brown" <cbrown@xxxxxxxxxxxxxxxxx>]

GM shifts pension burden to workers


March 7, 2006



By MICHAEL ELLIS

FREE PRESS BUSINESS WRITER

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*       What do you think about the changes in GM's pension plan? If you're
a white-collar worker, please contact Mike Ellis at 313-222-8784 or
mwellis@xxxxxxxxxxxxxx

General Motors Corp. said on Tuesday that it will modify its pension and
retirement savings plans for its U.S. salaried workers and executives in an
effort to cut costs and reduce financial risk for the automaker.

With the changes, first announced by last month, GM will shift some
white-collar workers away from various defined benefit plans, putting the
risk of the impact from stock market fluctuations on retirement savings on
the worker rather than the company.

The changes do not affect the benefits of GM's current U.S. salaried
retirees or the vested benefits of former employees and pension benefits
earned prior to the transition date to the new plan will be preserved.

In addition to the changes, beginning next year, all eligible U.S. salaried
employees who contribute to GM's 401(k) retirement program will receive a
company match of 50% on the amount the employee contributes, up to 4% of
base salary. GM stopped matching employee contributions to the 401(k) plan
this year in an effort to save money.

Effective Jan. 1 next year, GM will freeze the accrued pension benefits for
U.S. salaried employees under the current formula.

GM salaried workers hired before Jan. 1, 2001 who currently participate in
the traditional defined benefit plan with a final average pay will receive a
modified benefit after the effective date that is based on 1.25% of average
monthly base salary for their future years of service with the automaker.

GM salaried workers hired on or after Jan. 1, 2001 who currently participate
in a cash balance plan will receive a contribution to their salaried 401(k)
program from GM of 4% of annual base salary. Existing balances under the
cash balance plan continue to earn annual interest credits.

About 1,950 U.S. executives who participate in the Supplemental Executive
Retirement Plan (SERP) will have those benefits frozen as of Dec. 31, 2006.
Effective Jan. 1, 2007, the SERP plan will be amended and aligned with the
the revised U.S. salaried employee pension plan.

Contact MICHAEL ELLIS at 313-222-8784 or mellis@xxxxxxxxxxxxxx