GMRA slaps GM for latest salary pension actions
Who knew? Finally the General Motors Retiree Association (GMRA) came out swinging on behalf of the 118,000 salaried retirees of General Motors Corporation (NYSE: GM) in a major way for its decision to trash the retirement plan.
Now before you go boo-hoo on me, be apprised of the reasons. First, the end of the retirement program does more than just shift risk from GM onto an insurance company; mainly Prudential for those who do not take the lump sum. It is still a form of double jeopardy.
For example, the present retirement program is protected by the U.S government. However, the moment it is shifted to Prudential or to some other option, that guaranteed protection dies.
Is GM compensating retirees for that level of loss? No. According to GMRA, “By eliminating this large class of salaried retirees from the pension plan, you are abandoning the hard-earned benefit of an ERISA-protected pension promised to thousands upon thousands of GM retirees in return for their commitment and loyalty. This surpasses basic unfairness; indeed, it is sheer irresponsibility and greed.”
For the record, salaried retirees are being offered two choices: a lump sum or a movement to Prudential which is a group annuity. According to GMRA, “in either case GM wins and retirees lose. Taking a lump sum places the retirees plan assets at risk in the financial marketplace while reducing GM's liabilities and temporarily props up the company balance sheet.”