GM Moves From Pension Plan to 401(k) - Feb. 15, 2012
General Motors has shifted its senior salaried workers away from a traditional pension plan to a 401(k) plan, said a company spokeswoman on Wednesday.
GM (GM, Fortune 500) froze its defined benefit pension plans for 19,000 U.S. salaried workers and shifted them to a 401(k) plan, said GM spokeswoman Lynda Messina.
These 19,000 workers were hired before 2001, when the automaker was using the traditional pension plan. The pension plan is not eliminated. Instead, it is frozen, so whatever funds were put into it until now will be received upon retirement.
GM said its pension plan was underfunded. The automaker said it would release more details on that Thursday.
The automaker said that part of its incentive for switching the plan to a 401(k) is to transfer investor liability from the employer to the employee.