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Category: Bankruptcy Law
Satisfied Customers: 17252
Experience:  14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
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What is going to happen to General Motors retirees pension,

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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.

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