NOVI, Mich. — For weeks, John and Kathy Matthews have agonized over the choice: accept $818,000 in a lump sum from General Motors to buy out Mr. Matthews’s pension or keep collecting a check of $4,854 a month.
They have consulted nearly a dozen financial advisers, spent countless hours on the Internet, discussed scores of possible outcomes, and lost a ton of sleep. And with the deadline to decide on Friday, they still don’t know what they will do.
“It’s not an easy decision because we don’t know how long we’re going to live,” said Mr. Matthews, 63, in an interview with his wife at their airy condominium in this suburb west of Detroit.
G.M. has made similar offers to about 42,000 of its 118,000 former white-collar employees and surviving spouses. Those who decide to keep the monthly check will be switched to an annuity provided by Prudential Insurance. Those who take the lump sum will be saying goodbye to G.M.’s financial embrace forever.
G.M. said the change would eliminate $26 billion of its $134 billion in worldwide pension obligations. The automaker’s global pension plan is underfunded by about $25 billion, which has been a cloud over the company’s finances.
Some said the pension change was a cultural shift for an automaker whose hefty pay and benefits earned it the nickname Generous Motors.Page 1 of 7 | Next Page