According to an article in the Star-Telegram, General Motors’ retirees will lose dental and vision coverage and be forced to pay higher healthcare co-payments starting in July due to the GM bankruptcy. But the automaker’s retiree pension plan seems to be safe, at least for now.
The article said:
The federal Pension Benefit Guaranty Corp., which guarantees pensions up to certain limits, noted Monday that GM and the U.S. government intend for the automaker’s pension to stay with GM – and not be jettisoned.
“The PBGC will work with all parties to achieve that outcome, which would be in the best interests of GM’s more than 670,000 pension plan participants and the pension insurance program,” the agency said in a statement.
For most GM retirees, their pension check makes up 75 percent of their retirement income, so losing it in the GM bankruptcy would be financially devastating. Healthcare reductions are less damaging than losing the pension benefits but will still take a toll on GM retirees’ quality of life. For retirees healthcare is not just a luxury, it is essential as certain health issues tend to emerge as one ages. One of the GM retirees noted this fact quite bluntly in the article:
“My teeth are going bad because I’m 69,” he said. “My sight is going bad because I’m 69. And you know damn well what happens to hearing.”
This GM retiree will be forced to forego necessary dental surgery because of the GM cuts. But his biggest fear is that the GM bankruptcy will eventually force the company to alter their pension fund which is currently $20 billion in the red. Losing pension income could cause many retirees to succumb to foreclosure or even be forced to file personal bankruptcy.
Unlike the previous generations, many retirees still have homes that are heavily mortgage plus other debt such as credit cards and car loans. Every dollar counts towards paying bills that don’t go away once they stop working. And the GM retirees are amongst the luckily ones, they still have a pension, most Americans are now hopelessly watching their 401(k) retirement accounts literally disappear while they face the prospect of foreclosure and bankruptcy.