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August 20, 2014
Pension Update August 2014

Dear GENMO Member:

You recently received an “Update to Members regarding Plan Funding” from General Motors of Canada.  This note applies to everyone’s pension.  No matter when you retired, no matter what program, no matter whether you were in the class for the benefits law suit or not; the pension issues apply to you.

GENMO continues to represent you and your pension issues with politicians, government agencies, and GM.  No one else does.

Unfortunately the message has not changed very much since last year.

Just as last year the message is:
•       Your pension is underfunded
•       GMCL does not have a plan to fully fund the pension
•       GMCL is committed to paying the lowest amount possible into the plan

Our pension's wind up ratio has improved to 82.6% from 75.4%.  The windup ratio is the percentage of pension obligations the plan could cover if the plan ceased operations; this is the key ratio to focus on.  Another important point is that while the wind up ratio is 82.6% if there was a restructuring or bankruptcy there would be additional costs that would reduce that number.

Certainly good news, but as we discussed at the Annual General Meeting on May 22, 2014, better isn't good enough.  As part of the bailout agreement we lost Pension Benefit Guarantee Fund (PBGF) coverage.  The PBGF is an Ontario government pension insurance program.  If we were covered, the PBGF would pay us $200 - 300 per month to offset some of the reduction in a bankruptcy situation.  To regain coverage, our pension has to be 100% funded for three consecutive years. 

Further, GM has committed to making only the minimum pension contribution since 2009.  This has resulted in our pension experiencing solvency deficiencies four of the past five years.

The note refers to changes GM Canada negotiated in 2009 with the Province of Ontario as part of the bailout.  Changes that were largely detrimental to us and with no participation from the salaried retirees; we had no voice.

Once again we would like to clarify a couple of points here.

First the $200 million annual payment was negotiated as GM Canada’s maximum pension contribution from operations to the two pension plans; hourly and salary.  The calculated minimum contribution is much higher. 

Second, the difference has been funded from that $720.2 million mentioned (the $720.2 is the portion allocated to the salary plan of the total $4 billion Prior Year Credit Balance created in 2009).  The Prior Year Credit Balance will be essentially $0 at the end of this year at which time GM Canada will have to rely on operations for the full pension contribution to both plans.

In the memo there is a statement "If the Plan were wound-up, GMCL would be required to fully fund the wind-up liabilities ..." This does not mean that our pension is safe should GMCL go bankrupt.  What is left out of this statement is that it assumes GMCL would have cash and/or assets to fully fund at wind-up.  Right now the wind up ratio is 82.6%.  As the NORTEL retirees have experienced, there is usually no money left when it comes to dealing with a pension shortfall.

GENMO continues to advocate addressing our pension issues.

If you know GMCL salaried retirees who are not members of GENMO, please send them this note.  They too need to understand how fragile our pension is.

No one else is protecting our pension.  We need to.

If you have any questions, please direct them to

Your GENMO Executive

Brian Rutherford, Mike Powell, Lynn McCullough, Jan O’Neill, Mike Black, Denise Cay, Garry Marnoch, Alanna Lyczba


Wednesday, January 23, 2019