GM Freezes Pension Plan of Salaried Workers

The New York Times is reporting that General Motors Corp. is making extensive changes to the retirement plans of its salaried employees, which will cut pension costs by $1.6 billion this year and lead to lower benefits for workers.

GM plans to freeze its defined-benefits pension plan and shift to less expensive retirement programs for 42,000 workers in the U.S. Jerry Dubrowski, a GM spokesperson, said the company could not estimate how the steps would affect the average worker. But Brian Foley, a lawyer in White Plains, NY, who specializes in pension matters, said in the New York Times article that the changes have to be a significant hit for the typical salaried employee.

Benefits of retired salaried workers are not affected and neither are those of active or retired members of the United Automobile Workers union.