Seeks to Fully Fund Pension Funds
By Chrissie Thompson, Detroit Free Press
January 12, 2011
As General Motors
seeks to fully fund its pension funds, its chief financial officer plans
to change the assets to more bonds and fewer equities -- a move that will
bring more stability to GM's own market value.
GM has a
$100-billion pension plan to provide for its 700,000
retirees, who outnumber current employees 10-1.
pension plan is twice the size of GM's market value, calculated by
multiplying the number of outstanding shares by the current price.
swings in the pension plan have massive changes in the value of the
company," Chris Liddell told journalists Tuesday. "That's just
not a good way to run it."
plans consist of stock and debt investments, with high expected returns,
Liddell said. GM wants to move to more fixed assets.
ideal pension plan, "the assets exactly match the liabilities, in
their maturity and their risk profile," Liddell said.
pensions were underfunded by $17.1 billion at the end of 2009. At the end
of last year, the company made a $6-billion contribution -- $4 billion in
cash and $2 billion in stock -- to lower that number.
GM is to update
its underfunding number when it reports fourth-quarter earnings in the
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