Free Special Resources
Get Your FREE Special Report. Download Any One Of These FREE Special Resources, Instantly!
Featured Special Report
Claim Your Free Cost Per Hire Calculator
This handy calculator lets you plug in your expenses for recruiting, benefits, salaries, and more.

Graphs automatically generate to show you your annual cost per hire and a breakdown of where you are spending the most money.

Download Now!
March 08, 2006
GM Freezes Pension for Salaried Workers

For a Limited Time receive a FREE Compensation Market Analysis Report! Find out how much you should be paying to attract and retain the best applicants and employees, with customized information for your industry, location, and job. Get Your Report Now!

General Motors Corp disclosed that it will freeze the accrued pension benefits for U.S. salaried employees under the current plan formula and shift toward a broader reliance on defined contribution plans in the future.

The changes are effective January 1, 2007. Salaried employees who were hired on or after January 1, 2001 will move exclusively to a defined contribution plan for future service. Salaried employees hired before January 1 will remain in the defined benefit plan. However, they will receive a reduced retirement benefit for future accruals under a new formula.

The changes have no affect the benefits of GM's current U.S. salaried retirees or the vested benefits of former employees.

The changes include the following:

  • GM salaried employees hired before January 1, 2001, who currently participate in the traditional defined benefit plan with a final average pay formula will stop accruing future benefits under that formula and receive a modified future benefit based on 1.25 percent of average monthly base salary for their future years of service.
  • GM salaried employees hired on or after January 1, 2001, who currently participate in a cash balance plan, will stop accruing future pay credits under that plan and receive a contribution to their salaried 401(k) program from GM of 4 percent of annual base salary. Existing balances under the cash balance plan continue to earn annual interest credits.

In addition to these actions, effective Jan. 1, 2007, all eligible U.S. salaried employees who contribute to GM's 401(k) program will receive a company match of 50 percent on the amount the employee contributes up to 4 percent of base salary.

Featured Free Resource:
Cost Per Hire Calculator
Twitter  Facebook  Linked In
Follow Us
Copyright © 2018 Business & Legal Resources. All rights reserved. 800-727-5257
This document was published on
Document URL: