February 15, 2012

DEFINING THE CONTRIBUTION, NOT THE BENEFIT:

GM moves from pension plan to 401(k) (Aaron Smith and Chris Isidore, February 15, 2012, CNNMoney) 

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.

Posted by at February 15, 2012 8:09 PM
  

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