When GM went into bankruptcy protection on June 1, it said that significant sacrifices on the part of salaried employees and retirees would be required. Now, some details of the radical changes coming are starting to emerge.
In a letter to retirees, GM CEO Fritz Henderson said certain benefits are being trimmed by two-thirds, with biggest cuts starting at the top.
Currently, all executive retirees with an Executive Retirement Plan (“ERP,” formerly SERP) benefit have been subject to a temporary reduction of at least 10% since May 1, 2009. However, when New GM emerges from bankruptcy, that 10% cut will become permanent. For exec retirees with benefits of more than $100,000 annually, the amount above $100,000 will be cut by two-thirds. Life insurance under the Supplemental Life Benefits Program (SLBP) and Supplemental Group Life Insurance Program (SGLI) are being eliminated.
Retiree Health Care
Effective January 1, 2010, GM’s Salaried Health Care Program will be further reduced for salaried retirees, surviving spouses and their eligible dependents. Individuals affected by this change include:
- Salaried retirees, surviving spouses and their dependents eligible to enroll or who currently are enrolled in the GM Salaried Health Care Program.
- Current employees who are eligible to enroll in the GM Salaried Health Care Program upon retirement.
The new plan will include benefits and coverage for medical and prescription drugs only. Dental, vision, and extended care coverage will be cancelled. Cost sharing provisions (e.g., monthly contributions, deductibles, coinsurance and out of pocket maximums) will increase substantially.
The GM Benefits and Services Center and current GM health plan carriers do not have any additional information regarding these changes, Henderson said. Further details will be sent directly to impacted employees and retirees this fall as part of the 2010 Annual Enrollment.
“I realize the sacrifices that we need to make will be very difficult for you and your families. While the actions we are taking to reinvent GM are many and affect a vast range of stakeholders, the impact on former leaders such as yourself, who dedicated so many years to the service of General Motors, is unquestionably very difficult,” said Henderson.
“Much has changed from the Company I joined over 20 years ago, however, I am confident the many actions we are taking will establish a foundation for the New GM that will win in the future. I appreciate your continued support of GM,” he concluded.
Tags: gm bankruptcy, GM CEO Fritz Henderson, gm retirees, ken zino, Retiree Health Care Cuts, thedetroitbureau.com
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