A bold step for GM fixing legacy pension obligations.
It boils down to this – “defined benefit plans” put the obligation on some random person in the future. “Defined contributions”, even with partial matching percentages from corporations (funded AT THAT TIME) is the only logical solution.
The hybrid “let’s keep some defined benefit and have this portion be “defined” contribution” is just wishful thinking from a bygone era. The irony being that the majority of wealth is controlled by the Boomers, who are both the investors demanding the return on the investment and at the same time demanding the correction in unfunded pensions.
Or to put it another way, if you give people free money they will take it. You can’t “earn” a defined benefit. You can only “earn” a defined contribution. Even if matched. And when the company can’t sustain it, suddenly the taxpayer is on the hook? Baroo?