General Motors Canada’s struggling pension plans for retirees have seen a slight uptick in recent times, but according to The Globe and Mail, the combined deficit for the fund is still in excess of $3-billion.
GM Canada’s plans for salaried and hourly workers stood at negative $3.7 billion on September 1, 2013. This was an improvement over the $4.6 billion deficit posted a year earlier, but still more than other Canadian pension plans. The 36,500 Canadian GM retirees are worried about the state of the pension plans, and have expressed their unease that the company will reduce the solvency deficiency in the plans later on in the decade, when the $4 billion which was dumped into the plans by the country’s government will be all used up.
The $4 billion which was given to GM Canada was part of the 2009 bailout of GM. GM Canada was able to pull from the fund over the past five years to support contributions to the pension fund.
In addition to the fund being deep into the red zone, the value of assets in the plans has fallen from $11.01-billion to $10.79 billion. This is despite a 5.5 percent return on the assets for the salaried worker’s plan and a 4.8 percent return on the hourly worker’s plan.
The Globe and Mail says the assets in the plan for union workers would cover 72 percent of the outstanding liabilities as of Sept 1., which is actually up from 69 percent a year earlier. The funding for salaried worker’s pension plans is up more, sitting at 83 percent, a jump from the 75 percent posted the year before.
GM Canada spokeswoman Faye Roberts told The Globe and Mail that the plans have also improved in other ways.
“GM Canada has recently made significant contributions to the company’s pension plans and has committed to making an additional annual contribution in 2014 and to fund the plans on a solvency basis thereafter.”
The pension plans cover retired workers from GM Canada’s head office in Oshawa, Ontario and its factories, located in Oshawa ON., St. Catharines ON., Windsor ON., and Sainte-Therese, Quebec.