GM Letter on Pensions
Aug.1, 2014 RE: GMCL’s recent letter mailed to members about their Pension Plan “Update to Members regarding Plan Funding” has many active members, and retirees concerned about their pensions. Many members are calling their Unifor Reps, and asking what does this letter mean? What do I have to do?
First of All, all members have received this same letter every year since 2010. So this is the 5th letter that has been mailed out to members. It has always come around July 25th every year. Mark that date on your calendar for next year; you will get another one then. The plain and simple truth is that you do not have to do anything. The letter states, “No response or action on your part is required”.
GMCL is required to update each member on the funding of the pension plan every year, and this is what they are doing. This is required based on the “GM Regulation” found in Ontario’s Pension Benefit Act (PBA). There is a lot of information, and data in this letter. If you don’t understand it, don’t worry; only an actuary would be able to understand this information.
I will try to explain what the different sections mean:
The first part talks about what happened in 2009. I would assume that most members realize that GM was in financial difficulty in Canada and the US. Note that GMCL did not go bankrupt in Canada (CCAC), but were aided by loan monies from the federal, and provincial governments. GMCL decided to use some of this money to pre-pay some of the future pension plan obligations. GMCL put $3.28 billion into the pension plan. They were not putting in the money to make up for shortfalls of the past, but they were prepaying what they believed they would owe in the future years of 2010,2011,2012,2013, and 2014.
It’s a good story, but it’s in the past.
The second part talks about all the percentages; 84%, 83%, 72%, 68%, 65%, 45%.
These numbers are used as a basis for calculating how much money GMCL has to pay into the pension plan for the year.
So which numbers are important?
The only one of importance is 65.9%, and this represents the bottom line. How much a member would get on the dollar, if the GMCL pension plan failed. So, if everything went wrong, you would still get 65.9% of your pension. This amount has gone up about 3% over the past year, so I believe this is a good sign.
I have been to a meeting in Oshawa with Jo-Ann Hannah (Unifor Director of Pensions and Benefits), and GMCL’s pension administration, and the actuaries just lately to discuss the most recent numbers. We are all in agreement that this is good news that the plan has been holding its value, or has gone up in value each year, over the last 5 years. Ron Svajlenko, and Glen Grill (Local 222) and Paul Lucas (Local 636) also attended.
So what can you do?
As long as GMCL pays into the pension plan, the monthly amounts that are mandated by the law (the Pension Benefit Act), then it’s all legal. The FSCO (The Financial Services Commission of Ontario) is the overseer for this pension plan in Ontario.
(1)You can contact the FSCO with your questions: Use reference number of plan (0340968)
Toll free: 1-800-668-0128
(2)You can contact the GMCL Pension Plan Administrator with your questions. Mail your questions to:
“Attention” Pension Administration
1908 Colonel Sam Drive
don’t be shy, they will respond to your questions.
(3) You can contact your elected reps at Unifor.
Unifor-GM Unit Pension Rep