FAQ & Answers For GM Retirees

The following Q&A was provided by General Motors Corp. to retireees following the company's Chapter 11 bankruptcy filing: 


What happens to retiree benefits?
Between now and the close of the sale of GM’s assets to the New GM, we do not expect there to be any changes to the qualified pension plans, health and life insurance benefits that GM currently provides to retirees, survivors and beneficiaries.  It is too soon to know with certainty how benefits for retirees of our [U.S.] operations may be affected once sale to the New GM has been completed.  However, we do anticipate a reduction of certain benefits in the future.

We can also provide assurance as to the following:

The assets in GM’s qualified pension plan are not available for creditor claims.  Federal law protects the funds in qualified pension plans, such as GM’s, from the claims of a company’s creditors.  This means that GM cannot use pension plan assets to meet its obligations or to pay its debts.

Federal law protects qualified pension plans from retroactive changes to plan benefits.  Further, qualified pension plans cannot be terminated unless they meet the standards for termination set out by federal law, and a decision to seek to terminate a pension plan would have to comply with those standards.  The Pension Benefit Guaranty Corporation also provides an additional layer of protection for defined benefit pension programs.

Can I still file my health care insurance claims?
Yes.  You can and should file your health care claims as you normally would.  For those retirees who many have health savings accounts, you should use those as you normally would.

Will I continue to receive my $300 pension benefit?
The $300 level benefit is a pension benefit.  The GM Retirement Program for Salaried Employees (SRP) is a qualified retirement program, protected under the Employee Retirement Income Security Act of 1974 (ERISA).

Are the assets in GM’s pension plans protected from creditors’ claims?
The GM Hourly-Rate Employees Pension Plan (HRP) and GM Retirement Program for Salaried Employees (SRP) are qualified retirement programs, protected under the Employee Retirement Income Security Act of 1974 (ERISA).  The assets held in the pension trust are not available for creditor claims.

How does this impact life insurance coverage?
Employee and retiree life insurance coverage amounts continue unchanged at this time.  Claims can continue to be filed in the normal manner.

Will I still receive my GM vehicle discounts?
There is no plan to change the GM vehicle discount program

Is my S-SPP or PSP 401(k) part of the GM bankruptcy?
Amounts contributed to a 401(k) plan (S-SPP or PSP) by or on behalf of a participant constitute assets of the 401(k) plan and are held in trust for the benefit of the participant.  The participant’s 401(k) plan assets do not belong to the plan sponsor (GM), and are segregated and separate from the plan sponsor’s (GM's) assets.  Therefore, a participant’s 401(k) plan (S-SPP or PSP) assets, including any employer contributions, are not property of General Motors and cannot be reached by GM creditors in a bankruptcy proceeding.

NYSE Delisting Statement:
GM received notice from the NYSE on June 1, 2009 that it intended to suspend trading of GM common equity effective June 2, 2009 and would move to begin the delisting process.

If GM’s common stock is delisted by the NYSE, market makers not affiliated with GM may initiate limited trading in one of the over-the-counter markets.  Stockholders are advised to consult with their personal financial advisors concerning investment decisions and questions concerning how to trade shares.

What happens to the shares currently outstanding?
We expect they will continue to trade over the counter while GM is being wound down.

What does this mean for GM’s current customers and future car buyers?
For our current customers, GM will succeed and win by taking care of you every day.  There will be no interruptions in GM’s ability to take care of our customers and honor customer programs, warranties and provide replacement parts.  In fact, the court has authorized GM to honor customer warranties and programs as it always has.  You should have total confidence that:

• Our products are safe and sound;
• We will honor your existing warranty;
• GM dealers will have the same access to replacement parts as they always have;
• Customers of discontinued brands or dealerships that have closed as part of GM’s viability initiative will continue to be supported by other GM dealerships;
• Customer promotions and incentives will continue without interruption;
• You do not need to do anything differently regarding your warranty;
• There is no impact on OnStar service; your OnStar subscription will remain in place
• GM continues to have a nation-wide network of Goodwrench technicians trained to perform maintenance and repairs on your GM vehicle

This is good news for customers who want to buy cars from an automaker with an award-winning lineup of cars and trucks with rock-solid warranties and other customer-support programs, one that is a leader in green technology, and one that has a promising future.  All customers should have confidence in New GM’s ability to serve the needs to customers in every way, including the commitment and ability to honor warranties for many years to come.

Will New GM honor customer warranty claims?
Yes.  GM will succeed and win by taking care of our customers every day.  New GM will assume the obligations to support the express warranties issued by GM to its customers.

Will customers still be able to get service parts to repair their vehicles?
Replacement parts are, and will continue to be, available to service and maintain GM vehicles.  Customers can be assured that GM and our dealers are open for business and are committed to meeting the service needs of our customers now and well into the future.

Did my GM Card earnings program change?  Are my earnings still valid?
We intend to continue honoring customers’ GM Card earnings.  In its first day motions GM asked the Court to maintain the GM Card program.  Customers can continue using their GM Card at more than 18 million locations where MasterCard is accepted.

What is section 363 and how is it being used to launch the New GM?
Section 363 permits a company in chapter 11 to sell assets and in some cases substantially all its assets.  GM intends to use that ability to sell the strongest parts of its business to launch a new and successful enterprise.  The purchaser’s business will be built upon only the strongest parts of our business – our employees; our best brands (Cadillac, Chevrolet, Buick, GMC), and the plants and other hard assets that those brands rely on; the contracts we need to secure supplies and keep our business moving; and the equity we own in our domestic and global subsidiaries.  The New GM will be led by GM’s current management team.

Why did GM choose the section 363 path?
With the support of our largest secured lender, the U.S. Treasury, section 363 allows GM through a court-supervised sale, to create and launch the New GM quickly.  We currently hope to close the transaction in 60 to 90 days from June 1.

How is the New GM being launched?
It is anticipated that the valuable assets of GM will be sold to a new entity to quickly launch a leaner, more customer-focused and more cost-competitive automaker, with a much stronger balance sheet that is positioned for profitability.  The New GM will be built from GM’s strongest brands and operations.

What should I tell my friends and people I’ve sold cars to?

• The court-supervised reorganization we are pursuing helps us accelerate our reinvention:
• It has strong safeguards for our customers and our business.
• GM dealers will continue to service GM vehicles and honor GM warranties.
• New U.S. government guarantees of manufacturers’ warranties are designed to reassure consumers without requiring any extra time or paperwork for car buyers or owners.
• Pending approvals, the New GM is expected to launch around September 1st with two distinct advantages:
• It will be built from only GM’s best brands and operations, and it will be supported by a stronger balance sheet.
• The New GM will put customers first, concentrate on four core brands, and continue investing in green, energy-saving technologies.

How Can I Stay Informed?
Throughout this transition process, updates will be available at www.gm.com/restructuring.