GM freezes US pension plan
Will instead pay salaried workers annual bonuses
DETROIT: General Motors Co. (GM) will freeze its US pension plan for longtime white-collar workers and give all of its 26,000 salaried employees annual bonuses.
The company will not, however, pay raises in an effort to put a hold on expenses.
The Detroit-based automaker said roughly 19,000 salaried workers hired before 2001 will move from a traditional pension with guaranteed payments to a 401(k)-type plan with contributions based on salary and bonuses.
Employees hired after 2001, which represent about 30% of the company’s salaried workforce, are already in a defined contribution plan.
The changes are set to take effect Oct. 1, but workers will keep all pension benefits they have already accrued, officials said.
GM vice-president of global human resources Cindy Brinkley said the changes are geared toward increasing profitability and reducing risk.
The changes also include offering salaried employees an additional five days of vacation and eliminating a plan allowing them to buy up to five days.
The announcement follows other pay-and-benefit-related news from the other two automakers representing the Detroit Three.
Chrysler CEO Sergio Marchionne said earlier this month that both salaried and hourly workers would get profit-sharing checks, but he would not reveal the amounts.
Ford Motor Co. said last month that it was giving pay raises and bonuses to 20,000 white-collar workers in the US and Canada.