GM announced it offered $3.6 billion on lump sum payouts to almost 13,200 eligible U.S. salaried retirees, who accepted one-time payments over monthly pension checks.
GM said that until now it has offered lump-sum payments to 44,000 salaried retirees, with the average check being just under $273,000.
“A lot of retirees valued having that alternative put in front of them,” GM Chief Financial Officer Dan Ammann said in a call Wednesday with analysts. “It was a good deal for them.”
GM also announced it expects this month to close its transaction with Prudential Insurance Co. of America, the company which takes responsibility for U.S. salaried pension obligations. On June 1st, GM was announcing it expected to offer the lump sums to about 42,000 salaried retirees, who left the company between Oct. 1st, 1997, and Dec. 1st, 2011. This part of the agreement made with Prudential, which GM estimated will help the company cut the pension liability by $26 billion.
“We were very pleased with the outcome of this transaction,” Ammann said in a call with reporters Wednesday. “It’s good for the company.”
A total of 118,000 GM’s white-collar U.S. employees are to be affected by the changes and those who didn’t choose lump sums will receive monthly payments for life from Prudential.