As General Motors posted a surging $7.6 billion dollar net profit for 2011, the company announced that it will make slight revisions to the benefits of both its white and blue collared workers.
For starters, the company plans to freeze its traditional pension plan for all salaried workers in the U.S., who will begin to save exclusively through 401(k) plans going forward. As a result, all white-collar workers will receive an extra week of vacation, with year-end bonuses that could be larger for some, but not all white-collar employees. And as stated earlier, GM’s 47,500 hourly workers in North America are eligible for up to $7,000 in profit-sharing bonuses. While that’s transparent, GM vice president of global human resources Cindy Brinkley would not disclose the size of the bonuses salaried workers and executives would make.
Lastly, The company also announced today that it is taking further steps toward its goals of fully funding its U.S. pension plans while reducing risk. Effective Sept. 30, 2012, GM will freeze its defined benefit pension plan for U.S. salaried employees, who instead will receive contributions to a defined contribution plan, or 401(k). This initiative will affect GM’s U.S. salaried employees hired prior to Jan. 1, 2001. Salaried employees hired after that date are already covered by a defined contribution plan. Globally, GM’s pension obligations in its plans topped $128 billion at the end of 2010. As of Sept, 30, 2011, those plans were underfunded by $8.7 billion, or a funding of 88 percent.