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. (more…)