Catherwood LibraryILR School

Despite the ongoing troubles facing General Motors, the firm apparently has enough cash to secure pension benefits for the over 400,000 retired employees expecting them. The stability of GM's pension fund is important given its size, and the likelihood that a failure could wipe out the government's pension insurance fund. The fund's strength is a result of conservative management, including a heavier investment in bonds over stocks. However, the bleak economic outlook and continued financial woes of GM could quickly reverse the situation: the company is encouraging early retirement which increases pension costs, while halting additional pension contributions in order to conserve cash. Still, GM's pension fund has declined much less then other U.S. company funds this year.