Yet another “unaffordable” pension

This news came from Pensions & Investments on the 15th:

GM to freeze DB plan of salaried workers hired before 2001

General Motors Co., Detroit, on Sept. 30 will freeze the defined benefit pension plans of all salaried workers hired before 2001, said Lynda Messina, communications manager.

Effective Oct. 1, those salaried workers will be moved to an existing 401(k) plan for salaried employees.

This implied there was some problem with GM revenues, when nothing could be further from the truth. From today’s Guardian:

GM records its highest profit ever: $7.6 billion

DETROIT (AP) — General Motors earned its highest profit ever last year.

The 103-year-old company made $7.6 billion in 2011, up 62 percent from 2010.

Full-year revenue rose 11 percent to $105 billion.

At least the people at GM had the good manners to be upfront about the reasons for this. From P&I again:

Ms. Messina said GM is freezing the plan because “it will get us (GM salaried employees) on the same retirement plan. It will help employees share in the success of the business, strengthen the balance sheet and reduce risk.”

In other words, they are explicitly reducing GM’s risk, and shifting it to employees, which given the abysmal failure of 401k plans for all but the most highly compensated, will ultimately mean to the government (assuming there is any safety net left at all by the time they retire).

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