GM abandons DB pension plan for white collar employees

Automaker introduces defined contribution plan for salaried workers in U.S. hired before 2001
||Last Updated: 02/21/2012

DETROIT (Reuters) — General Motors is ending traditional defined benefit (DB) pension plans for its white-collar employees in the United States.

There will be no across-the-board pay increases for GM's 26,000 U.S. salaried workers in 2012, but some workers will get richer bonuses based partly on the nature of their jobs, said Cindy Brinkley, head of human resources for GM.

GM's pension obligations were underfunded by about US$10.8 billion by the middle of last year, the company said.

Under CEO Dan Akerson, GM has sought to create a "fortress balance sheet," and the pension moves are a part of that ongoing process, Brinkley said.

About 19,000 U.S. salaried workers hired before 2001 on the traditional pension plan will be shifted to a defined contribution (DC) plan as of Oct. 1, 2012, Brinkley said.

U.S. salaried workers hired by GM after Jan. 1, 2001, are already in the DC plan, GM said.

Retired salaried workers will not experience changes in their pension plans, Brinkley said.

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