General Motors National Retiree Association
Over
The
Hill
Car
People
Established 2003
Minutes Of the GM Conference Call - May 4, 2009
The conference call was hosted by Preston Crabill, Director of Pensions and Securities, Brenda Curry, Retiree Communications and Linda Stouffer, Manager of Vehicle Purchase Program.
Much of the initial discussion was related to retirees’ questions concerning Over The Hill Car People, LLC – GM National Retiree Association and their meeting with the Auto Task Force in Washington. Mr. Preston advised this meeting did occur and that his department did provide assistance with facts and figures which are available to all GM clubs who request them. Some of the retiree statistics were questioned. Mr. Crabill verified they were accurate and were included in the presentation Jack Dickinson, President of Over The Hill Car People, LLC – GM National Retiree Association, made to the Auto Task Force on April 24, 2009. Mr. Dickinson provided all GM Club Presidents with his personal phone number and volunteered to answer all questions and concerns. The minutes of this meeting can also be viewed at the web site www.overthehillcarpeople.com .
Question Concerning Pensions:
Some Chrysler retirees had their pension checks withdrawn when Chrysler filed for bankruptcy. Can you advise if GM retirees’ pension checks will be handled in the same manner?
Answer:
Mr. Crabill advised they were not in a position to speak about Chrysler’s bankruptcy, but did acknowledge some retirees’ pension checks were affected. It was mentioned that most of these retirees were covered by what GM retirees know as the SERP portion of the pension. This is the part of pension payments that executives receive.
GM SERP (Salary Executive Retiree Plan) retirees have been notified they will receive a 10% reduction. It is not known at this time as to how this part of the pension payment will be affected if GM enters bankruptcy.
Remember, the GM Salary retirees pension plan is 95% funded and the PBGC (Pension Benefit Guaranty Corporation) itself is under funded by $11.2 billion as of December 31, 2008. In Mr. Crabill’s opinion, he did not think the PBGC would be interested in taking on the payment of GM’s pension plan. Mr. Crabill stated he was not an expert on bankruptcy and/or the PBGC, but did feel that the GM retirees’ pension checks would continue without interruption. Of course, no one really knows how this will all be handled until, and only if, GM enters a bankruptcy filing.
Additional information about Chrysler’s bankruptcy and retiree pension payments is listed at the bottom of this page.
Question:
What age is used to determine the benefits paid out by the PBGC?
Answer:
Mr. Crabill did want to correct a statement made during our last conference call on this subject. If the PBGC were to take over our plan in the case of a bankruptcy, the age determination for benefits would be based on the date of the bankruptcy filing, NOT the date of the pension fund termination.
Question:
How would Part A and Part B of the pension fund be handled in the event of bankruptcy filing?
Answer:
Part A – The PBGC would probably pay Part A plus interest.
Part B – No one really knows how the PBGC would treat Part B of our retirement program. However, Part B would most likely be considered a mandatory element and would be covered.
Question Concerning GM’s Spousal Benefits:
Are spousal benefits going to be affected by the restructuring process?
Answer:
Spousal benefits are expected to continue as they are now unless GM declares bankruptcy. At that time, the PBGC could take over the GM pension plan. If that should occur, these payments could be reduced to 50% of the retiree’s pension payment. The GM retiree spousal payment is now at 65% of the retiree’s pension payment. Again, it is Mr. Crabill’s opinion the PBGC will probably not want to take on the GM pension payment and current payments would continue at the current rate.
Question Concerning Pension Obligations That Reduce the Pension Fund:
Is the 95% funded GM pension plan being reduced by any other withdrawals?
Answer:
The $300.00 Health Care monthly retiree pension payment is taken out of the pension fund and, therefore, is an additional reduction to the fund. The volatility of the stock market can also have an effect on the pension fund investments. However, it was restated that there are enough funds in the GM pension plan to cover the current payments to all retirees for the foreseeable future. In the past, the average rate of return on the pension fund investments has been 8.5%+. The return rate in 2008 was -11%, not bad as compared to other companies and our own 401k/IRA accounts. This is an indication that GM and the investment managers have done an excellent job in managing our pension fund.
Questions About The Sale Of GM Stock By The Manager Of The GM Employee Stock Fund:
State Street Bank and Trust, the independent manager of the GM Stock Fund, started selling shares of GM Stock Fund on March 31, 2009. The sale was completed on April 24, 2009. Why did the sale occur?
Answer:
State Street found that both aspects of its two-part test had been met: a serious question concerning GM’s “short-term viability as a going concern without resorting to bankruptcy proceedings:” and “there is no possibility in the short-term of recouping any substantial proceeds from the sale of stock in bankruptcy.”
State Street invested the proceeds in short term fixed income and money market instruments (cash & marketable securities). On May 29, 2009, these funds will be disbanded and participants who don’t choose a new option will see their funds invested in a default investment fund, Pyramis Strategic Balanced Commingled Pool investment option. Hourly funds will be put into Pyramis Life Cycle Commingled Pool option.
If you own GM common stock outside of the SSPP, you and your financial advisor can do whatever you decide is best in your individual situation. No one really knows what will happen to privately held shares in the event of a bankruptcy filing by GM.
Related Question Concerning The Sale of GM Stock:
Why did GM wait so long to advise those affected?
Answer:
It was determined to be in the best interest of all participants to wait until the sale was completed.
After the question session, Linda Stouffer advised we now have a New GM Vehicle Incentive - - Tag A New Car (less than 300 miles) At Pep 2 Price! GM has 4,000 to 5,000 vehicles available for sale at the PEP2 discounted rate due to dealer reorganizations. GM will pay the shipping charge on these vehicles.
You can go to GM Family First web site http://www.gmemployeedeals.com/?utm_source=google&utm_medium=cpc&utm_term=gm_family_first&utm_campaign=ADT_CST for additional details and a phone number that you can call for assistance.
This concluded our conference call. I hope the information provided addressed some of your concerns. The comments stated above are from my recall of what was discussed and may contain information that needs to be reviewed with GM personnel, GM Benefits or others to assure accuracy.
We appreciate the opportunity to be included in this informative communication between GM and its retirees and want to thank Mr. Crabill, Ms. Curry, and Ms. Stouffer for their time and consideration.
Best Regards,
Jack Dickinson, President
Over The Hill Car People,
LLC
General Motors National Retiree Association
www.overthehillcarpeople.com
E-mail:
spoacdc1@aol.com
FOR IMMEDIATE RELEASE
April 30, 2009
PBGC Public Affairs
202-326-4343
Statement of PBGC Acting Director Vince Snowbarger on Chrysler Bankruptcy
WASHINGTON—Vince Snowbarger, acting director of the Pension Benefit
Guaranty Corporation, issued the following statement today:
"Chrysler's entry into Chapter 11 bankruptcy protection today does not
change the status of its defined benefit pension plans. The plans remain
ongoing under the sponsorship of Chrysler, and are insured by the Pension
Benefit Guaranty Corporation. As the bankruptcy process unfolds, the PBGC
will work with Chrysler, its unions, and all other stakeholders to ensure
continuation of the pension plans.
"Benefits in the Chrysler pension plans are guaranteed up to the limits set
by law. If one or more of the plans end in the course of bankruptcy, many
workers and retirees, typically those who retire at younger ages, would see
reduced benefits. Workers and retirees who are concerned about their
benefit and the impact of a possible pension termination should consult our
special Chrysler information page at
http://www.pbgc.gov/workers-retirees/chrysler.html."
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This is not a GM release but is information directly from the PBGC website.
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