Only 18 months until the 2023 UAW/GM National Agreement cycle should result in a vote by the membership to accept or reject. Over the next year-and-a-half this site will focus on some of the resolutions and ideas that may be discussed in the upcoming contract negotiations. Higher wages, limits on overtime, reducing job overload, and many others will be on the table. So will retirement benefits with many advocating for a pension and retiree health care.
Retirement benefits for those hired after 2008 do not include a defined benefit pension or retirement health care. If you, like me, are not going to receive a pension or health care would you be interested in having an annuity as part of your 401k? CNBC has the story of recent legislation that may make that option a reality.
Under a bill in the House, as much as 50% of a participant’s contribution could be put in an annuity, under certain circumstances. The idea, said supporters of the provision, is to help workers reach retirement with a source of guaranteed income derived from their savings.
“People have anxiety about running out of money in retirement, so this would be an option to alleviate that anxiety and give them a stream of income … while still retaining the other portion of their investment savings,” Zielinski said.
Currently, GM provides $1 a straight time hour + 6.4% of straight time wages to employees in the defined contribution 401k plan. Using the proposed legislation, if the company paid an additional fifty cents per straight time hour toward an annuity it would accomplish many of the same goals as a defined benefit pension. An investment that provides members with a income for the rest of their life in addition to the other options in the 401k plan. This would strengthen the bond between GM and their workers while keeping the liability of a company funded pension off the GM balance sheet. This would support a stronger stock price.
Does an annuity option sound good to you? Should the focus be on reinstating a pension? You have a while to think about it as resolutions for the national agreement will likely be requested in about a year.
