General Motors pays $2 billion in stock to underfunded pension plans
One week into the 2011 Detroit Auto Show, this contribution completes the estimated $6 billion contribution that was announced in October, consisting of $4 billion in cash and $2 billion in stock.
This time there were 40.4 million shares contributed to the hourly plan and 20.2 million shares to the salaried plan. The contributed shares qualify as a plan asset for funding purposes immediately, and will qualify as a plan asset for accounting purposes once certain transfer restrictions are removed in the near-term.
According to the news release from media.gm.com , all of the company’s U.S. pension plans were last remeasured concurrently on December 31, 2009 for GM’s 2009 Form 10-K, and were deemed under-funded in total by $17.1 billion.
Information on the 2010 year-end remeasurement and funded status for all its U.S. pension plans will be included in the company's 2010 Form 10-K.
GM U.S. pension plans currently provide benefits to approximately 688,000 participants, both uniion and non-union. Salaried retirees who have no real representation, though, have had to live with $5K annual deductibles for their medical care, in addition to total loss of dental and vision care.
For the record, while many lost employment, current employees made no sacrifice to their medical to that degree.
About the Author: Frank Sherosky has 39 years experience in the auto industry as a design engineer. He writes articles, books and ebooks via authorfrank.com, but may be contacted here by email: [email protected]
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