If GM went bankrupt what would happen to the pensions of retired salaried employees?

Answer 1

Your salary, which is funded by a qualified pension, would be ssecure and most likely unchanged. The money that is actually already set aside for it and any more needed by actuarial calculations done by the Dension Guarantee Benefit Corporation (the PBGC), would be virtually the first thing funded, at full and set asdie. The plan would move to the PBGC, a government backed organization, and andmisitered by them. Yes, if you have an extremelly high payout - generally somewhere over 125K a year, it may be reduced to that, but even that is uncommon. I have found the PBGC is the jewel of government run things...efficient, friendly, responsive and communicative to a fault. Really, it ain't like the rest. They have taken over many other big plans (the airlines and retailers etc..albeit obviously GM would be a new high), do it well and have learned from them all well. They are clearly of growing importance to our system. Again, they will figure out what is honestly needed to fund the obligations going forward...and they become virtually the fisrt one paid anything (and because of what they are doing, courts and creditors rarely try to protest), take over the commitment and administer it. Life has many concerns, but this is one you should not lose much sleep over. The one point to be concerned with is they only handle the salary type commitment...not ay medical or other benefits that were promised. While I wouldn't be suprised, if like many other places, GM has already basically eliminated them, those could be at risk. Finally, I would point out that if your benefit is coming from a Union, that is indpendent of GM and one would think they would continue funding and admis=nistering the plan as always.