How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask WALLSTREETESQ Your Own Question
Category: Bankruptcy Law
Satisfied Customers: 17080
Experience:  14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
Type Your Bankruptcy Law Question Here...
WALLSTREETESQ is online now
A new question is answered every 9 seconds

What is going to happen to General Motors retirees pension,

This answer was rated:

What is going to happen to General Motors retiree's pension, now??
During a bankruptcy, the corporation typically stops putting money into its pension fund. The Pension Benefit Guarantee Corporation, a quasi-governmental agency, takes over the pensions, which are vested under the Employee Retirement Income Security Act (ERISA). The PBGC generally pays only about 80 percent of the pension liability.


The Pension Benefit Guaranty Corp. said it will work with all parties involved in General Motors Corp.'s (GM) bankruptcy to ensure the auto maker's two pension plans remain under the company's sponsorship.

The PBGC noted the various parties in the case - including GM, the United Auto Workers union and the federal government - are intent to have the pension plans not be transferred over to the federal agency that protects pensions for workers.

"The PBGC will work with all parties to achieve that outcome, which would be in the best interests of GM's more than 670,000 pension plan participants and the pension insurance program," it said.

The agency noted last month that its deficit tripled between Sept. 30 and March 31 to $33.5 billion, but that it still had enough assets to pay benefits for years even if GM's plans came under the PBGC's administration. The plans for GM and Chrysler LLC, which is about to exit bankruptcy, were underfunded by $29 billion. For retirees under 65 years of age, the PBGC pays even less. For example, in 2008, the maximum guaranteed amount for a pension assumed by the PBGC was $4,312.50 per month for a 65-year-old worker, but only $1,366.88 for a 48-year-old retiree.

WALLSTREETESQ and other Bankruptcy Law Specialists are ready to help you

Related Bankruptcy Law Questions