Employee reward and benefits news
GM and Chrysler pensions are 'worrying'
The Government Accountability Office (GAO) in the US has revealed that pension plans at General Motors (GM) and Chrysler are in serious danger of failure if the companies do not return to a profitable streak soon.
It was revealed in the study that pension schemes for the pair are underfunded by $17 billion (£11.1 billion) and that the firms would need to pay many billions of dollars into the plans in the next five years in order to simply reach minimum funding levels.
However, it was asserted by the GAO that GM and Chrysler should be able to attract private investment and therefore return to profitability.
Despite this, the GAO implied that levels of uncertainty surrounding the long-term viability of US carmakers and key suppliers could still pose several significant risks to the future of the Pension Benefit Guaranty Corporation, which insures corporate pension plans.
It was revealed this week that GM lost £2.8 billion in the period following its emergence from bankruptcy in July through to the end of 2009.
Posted by Michael Ewing
