DETROIT (AP) — General Motors Co. says it plans to freeze its U.S. pension plan for longtime white-collar workers and give all salaried employees annual bonuses instead of pay raises in an effort to hold down expenses.
The Detroit-based automaker said Wednesday that roughly 19,000 salaried workers hired before 2001 will move from a traditional pension with guaranteed payments to a 401 (k)-type plan with contributions based on salary and bonuses. Employees hired after 2001 already are in the defined contribution plan.
The changes take effect Oct. 1.
GM also said it’s offering bonuses to all 26,000 salaried employees and will release the amounts when it announces quarterly and full-year earnings on Thursday.
GM vice president of global human resources Cindy Brinkley says the changes are geared toward increasing profitability and reducing risk.