Wednesday, September 19, 2007

401(k) Retirement Plans for GM Workers?

Gmlogowithtrademarkcopy_sw Yahoo! News (via Reuters) is reporting that:

General Motors Corp (GM.N) would give new union members 401(k)-style retirement plans instead of traditional pensions for the first time under a proposed United Auto Workers contract, Bloomberg News said on its Web site, citing people with knowledge of the talks.

GM also has proposed freezing cost-of-living raises to help pay for a union-run fund that would take responsibility for retiree health care, the report said.

After breaking off talks at around 9 p.m on Tuesday, GM and UAW negotiators were prepared to return to the bargaining table on Wednesday morning, a person familiar with the talks said.

The move from a defined benefit plan to a defined contribution plan would certainly be consistent with the larger movement in this country to consumer-driven benefit plans.  It is also interesting that the company is proposing to tie wage concessions to the proposed VEBA plan.

Hat Tip:  Dennis Nolan


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It's sad that the most used retirement plan is a government qualified plan. People should really enlist the help of a financial planner to do a much better retirement strategy and alternative.

Posted by: Manuel | Feb 15, 2008 8:45:14 AM

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