General Motors is now offering workers pension buyouts and is planning to freeze current pensions upon the end of the year. 118,000 GM workers are eligible for the buyout offer. However, 42,000 of these workers will be offered the option to take the lump sum of money in exchange for salaried pay or monthly pension benefits.
The company is prepared to pay the Prudential Insurance Company of America $29 billion to take responsibility for the $26 billion pension payment. These payments will be owed to workers who do not accept the buyout.
Those who received pension payments from last December and beyond, have the option to either accept a buyout offer upon retiring from their positions, or can proceed with pension benefits from the company on a monthly basis. Those who retired from General Motors prior to Oct. 1, 1997 will now receive monthly pension payments from Prudential, instead of from the General Motors company. Employees who retired on or following Oct. 1, 1997 and prior to last December 1, have the option of either accepting the buyout payment, continuing to receive monthly payments, now from Prudential, or can choose to agree to an insurance contract that would give the retiree monthly benefits.
According to Aon Hewitt's "2012 Hot Topics in Retirement" 35 percent of 500 employers surveyed, said that more companies are likely to offer buyouts in 2012. 19 percent reported a likelihood of including buyout options.
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