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General Motors announced significant changes today to its retirement benefits covering 42,000 salaried workers in the United States.

Card Consolidation Credit Debt G.M., the nation's biggest auto company, said it would freeze its defined-benefits pension plan and shift to less-expensive retirement programs.

benefits are available at various levels of coverage. Pension Plan The Pension Plan is paid for by the company. The plan pays a benefit using a formula based on your years of credited service and your eligible pay. You are 100% vested after three years of vesting service. If vested, you receive the value of your benefit upon leaving the company.

Credit Union G.M.'s move will result in a pretax charge against earnings of $120 million this year, the company said. But, it said the action also would reduce its 2006 pension expense by approximately $1.6 billion.

(AXcess News) According to the US Conference Board, pay increases for most salaried workers will stay below 3.5 percent this year and through 2007. The news marked the fourth consecutive year in a row that employers have held back on increasing salaried workers pay. "Moderate inflation has allowed employers to continue to control payroll costs, " says Charles Peck, compensation specialist at The Conference Board. "This continued control is reflected in the pattern of salary increase budgets this year compared with last year's projections."

Merchant Credit Guide Co The company's action does not affect the benefits of its retired salaried workers. It also does not affect active or retired members of the United Automobile Workers union.

Pension A lifetime monthly income paid to a person who has retired. Pension Benefit Guaranty Corporation (PBGC) In the United States, the organization that insures benefits in defined benefit pension plans. Its purpose is to make sure that all participants in qualified defined benefit pension plans receive the vested benefits to which they are entitled, even if their pension fund goes bankrupt. Per Capita Beneficiary Designation

Apply Online For Credit Card The move by G.M. echoes steps taken at a number of companies, including Verizon Communications, Motorola and I.B.M., which have frozen their pension plans and shifted employees to less-costly plans.

Workers angered by General Motors' (GM.N) plan to shut down an assembly plant in Portugal will stage protests starting next week at GM factories in Germany and Spain, a labor source told Reuters on Friday.

By Card Credit Debt Debt Guide Its action comes as G.M. is struggling to reverse a slide in sales and market share. G.M. lost $8.6 billion in 2005, most of it in North America. In November, G.M. said it would shut all or parts of a dozen plants and cut 30,000 jobs by 2008. The first of those plants, in Oklahoma City, closed last week.

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Credit Repair G.M. and other Detroit auto companies face heavy burdens for pension and health care expenses, which they refer to as legacy costs. The companies estimate these expenses cost them $1,800 per vehicle.

Active Credit Credit Guide By contrast, foreign automakers like Toyota, Honda, Nissan and others with factories in the United States generally do not offer defined-benefits pension plans, relying more heavily on 401(k) programs that require employees to contribute for retirement.

Credit Score "Our legacy costs in pensions and health care are an area of significant competitive disadvantage for us," G.M.'s chief executive, Rick Wagoner, said in a statement.

Bad Car Credit Guide Loan He went on, "These changes we are announcing today in our salaried retirement program, plus other changes we announced in recent months, will continue to provide our employees with a good benefit package today, while reducing G.M.'s financial risk and cost structure."

Bad Credit Loan In its announcement today, G.M. said employees who were hired before Jan. 1, 2001 and who participate in its pension plan would stop accruing future benefits under its current formula.

Credit Definition Derivative Instead, they would be paid a modified pension benefit based on 1.25 times their monthly earnings for future years of service.

Bad Credit Mortgage G.M. employees who were hired after Jan. 1, 2001, who currently participate in a type of retirement program called a cash balance plan, will stop accruing cash benefits.

The Insider Guide To Credit Instead, G.M. will make a contribution to their 401(k) plans, equal to 4 percent of their annual base salary. The cash they have contributed will continue to earn interest, however.

Business Credit Card G.M. also said it was freezing benefits that its executives have accrued under their supplemental pension plan. It said those benefits would be adjusted to reflect the salaried employees' plans.

Banker Complete Credit Guide Beginning Jan. 1, 2007, G.M. said it would provide a 50 percent match for salaried employee 401(k) contributions of up to 4 percent of their salary. It said that move would cost it $70 million more a year before taxes.

Credit Card Application GM was unable to estimate how the moves would affect an individual worker. "I think it's fair to say it will represent a reduction; I just can't say how much," a G.M. spokesman, Jerry Dubrowski, said.

Credit Guide Managing G.M.'s pension liability for 2004 was $89 billion. It does not have a liability number yet for 2005; G.M. estimates that it went up. G.M.'s pension plan is $6 billion overfunded. Companies are only allowed to freeze their plans, outside of bankruptcy, if they are funded.

Credit Card Offer G.M. signaled its intent to make the move last month, when it cut its dividend in half and announced changes in its health care plans for retired salaried employees. Last year, it reached agreement with the U.A.W. on modest cuts in health care coverage for union members. The plan still requires court approval.

Merchant Credit Guide Company At a hearing in Detroit on Monday, G.M.'s lawyers said approval of the union health care plan was necessary for the company's survival. Workers at Ford narrowly approved the cuts in December. Chrysler and the U.A.W. have not yet negotiated a similar program.

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