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DETROIT (Reuters)—General Motors Co. plans to make lump-sum pension payments in late August to white-collar retirees who have decided to take a buyout and forego a monthly pension check, a key step in GM's plan to bolster its balance sheet.
On Aug. 24, GM will mail pension payments to retirees who have requested paper checks. For retirees who requested receipt by electronic transfer, the payment will be made on Aug. 27, a GM spokesman said on Tuesday.
The GM spokesman declined to say how many retirees took the offer and said the largest U.S. automaker will offer more details about the buyouts this year. Retirees who opted for the buyout have until Aug. 23 to revoke their decision.
The buyouts are part of an overhaul of GM's white-collar pension plan announced last month. GM and crosstown rival Ford Motor Co., have taken a series of steps this year to manage the risks posed by their pension obligations, which have hurt their share prices.
GM's restructuring of its salaried pension plan affects 118,000 people and is expected to lop off one-fourth of the company's $109 billion U.S. pension liability.
The majority of the retirees will receive their monthly pension checks from a unit of Prudential Financial Inc. instead of GM starting next January.
But about 42,000 retirees were also given the option to take a pension buyout, a choice that forced retirees to confront vexing questions about their finances and mortality.
In some cases, these individual lump-sum payments could total hundreds of thousands of dollars. The GM spokesman declined to provide a range for the potential payments.
GM's pension move does not affect workers represented by the United Auto Workers union. UAW workers represent the bulk of the automaker's U.S. pension liability.
Ford, the No. 2 U.S. automaker, is offering pension buyouts to 98,000 white-collar retirees and former employees this summer.