DETROIT (WWJ) – General Motors is making big changes in its pension plan for white-collar retirees. GM’s Vice President Cindy Brinkley says it will offer retirees a lump-sum of cash to stop taking monthly benefits.
“We are going to be offering … an option to take their pension in a lump sum to 42,000 of our 118,000 retirees and in addition to that – those individuals who do not select the lump sum payment will now have their monthly pension benefit provided by Prudential,” said Brinkley.
GM Vice President Cindy Brinkley says retirees will now have three options for their pension payments.
“One, they can take the value of their monthly pension benefit in a lump sum, or … they could get a different type of annuity depending on their marital status, or thirdly, they can continue their monthly pension benefit as is except it would now be paid through Prudential,” said Brinkley.
GM says it will make three to four billion dollars in cash payments to its pension plans to buy the annuity. The company says the move will cut its pension obligations by 26 billion dollars.
The changes will take place starting in 2013.