• GM pension decision looms–Friday is vast approaching

    Comments:  | Leave A Comment

    Friday is deadline for 42K retirees to choose between lump-sum buyout and annuity

    Metro Detroit financial planners are clearing their calendars, adding hours and putting the pizza delivery man on speed dial as Friday’s deadline for the nation’s largest-ever pension buyout deal approaches for 42,000 salaried General Motors retirees.

    The white-collar nonunion retirees, who retired between Oct. 1, 1997, and Dec. 1, 2011, face a choice between accepting a lump-sum buyout that for many workers is well over half a million dollars, or receiving their current monthly pension payment from an annuity issued by Prudential Insurance Co. By the end of the year, GM plans to close its pension plan and remove the $26 billion liability from its balance sheet, in a move to boost the carmaker’s financial standing.

    In June, some retirees urged the General Motors Retirees Association to organize a boycott of GM cars and trucks.

    Financial planners are worried that some retirees will take lump sums and put them into investments that aren’t appropriate.

    Retirees should get at least a second opinion on any lump-sum investment option, planners say, and make sure they thoroughly understand all the ramifications of any investment.

    Despite all the fretting, the final decision is due Friday, and financial planners are girding for the last-minute rush. Then they’ll do it again: Come August, 98,000 Ford retirees will be asked to choose between a lump-sum buyout or continuing in Ford’s pension plan.

    Read expert opinions in The Detroit News

    Join the Conversation! Share and Discuss!

    Tags: »

    • More Related Content

    Comments

    blog comments powered by Disqus
    Follow

    Get every new post delivered to your Inbox.

    Join 187 other followers