October 2010

 Washington, D. C. -  GM Retiree Conferences

We recently visited Washington, D. C., to promote programs concerning the health and well being of all GM Salaried and Hourly retirees.  While there we met with several groups, agencies and congressional leaders’ offices to discuss pension and health care issues.

Of particular interest were visits with the Pension Benefits Guaranty Corporation (PBGC), Retirement USA, the Pension Rights Center, Protect Seniors Org. and congressional representatives’ offices.

Topic’s of interest: 

PBGC VS Company calculations for the correct funding status of retiree’s pension plans.  We learned that the latest figures for the GM salaried pension plan are approximately 89%.  The combined funding status of the hourly and salaried plans is estimated at 84%.  One of the groups we work with estimates that the top 100 United States company pension plans average an 81% funding status.  This is not where the Pension Benefits Guaranty Corporation (PBGC) and others would prefer all funds to be, but it is certainly not a crisis situation at this time.

Many articles have been written about how well the GM pension plan has been managed.  Regardless of scare tactics utilized by some, our GM plan appears to have been and continues to be in good hands! 

GM IPO offering is expected in November, 2010.  GM will not sell common shares, but it plans to offer preferred stock to raise money for pension payments and to retire debt. (http://finance.yahoo.com/news/GM-workers-get-chance-to-buy-apf-567740793.html?x=0).  Preferred shares behave like bonds because they pay a set dividend. They will be converted to common shares in 2013.  It is our understanding GM will not even be required to contribute to the plan again until 2014. However, according to a news release issued today, GM plans to contribute “roughly $6 billion in stock and cash into its under-funded pension plan.”  "General Motors Co., Detroit, will contribute at least $4 billion in cash and $2 billion in GM common stock to the company's $85.9 billion U.S. hourly and salaried pension plans, the company announced Oct. 28."http://www.pionline.com/article/20101029/REG/101029879

Social Security by some accounts is estimated to be well funded until approximately 2030.  Of course, this needs to be monitored and plans developed to assure continued financial deposits into the Social Security Trust Fund for the future participants.

Health Care is the hot topic of most conversations these days.  We are happy to advise we are now networking with an organization based in Washington, D. C. that has a bill in process to assist retirees with their health care issues.  The Emergency Retiree Health Benefits Protection Act (HR1322) will be reintroduced when Congress returns and the effects of the new healthcare reform legislation are analyzed.  This bill with its modifications will:

·         Prohibit group health plans from making post-retirement reductions in retiree benefits;

·         Require plans to adopt provisions barring post-retirement cuts in retiree health benefits;

·         Require employers to restore benefits reduced after retirement;

·         Provide an exemption for employers who are unable to restore benefits because they would experience substantial business hardship to be determined by the Secretary of Labor; and,

·         Create a loan guarantee program to assist employers in restoring retiree health benefits.

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“In the modified bill, we have addressed the concerns we have heard from Congressional

offices in the past several years by removing the Guaranteed Loan Program and creating a retroactive date. A recent survey of ProtectSeniors.Org members confirms that there will be little negative impact to retirees as a result of these two modifications. We are awaiting data from the Congressional Research Service that has been requested by Rep. John Tierney (D-MA), the original sponsor of H.R. 1322, on the impact of these modifications to further support our efforts. Armed with this information, we expect to stand a better chance of convincing Congress that this modified bill is a cost-effective approach to repair the hole left in the recently passed healthcare reform legislation.”

In the coming months we will be asking you to take several actions to indicate to Congress that you support this bill.  In the meantime, we invite your questions concerning health care issues as we now have a representative in Washington that will be happy to address your questions.  Please send your questions to this e-mail address: AskProtectSenior@aol.com .

GM National Retiree Association/Over The Hill Car People

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