General Motors 2014 Annual Report Download - page 101

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Significant Plan Amendments, Benefit Modifications and Related Events
U.S. Salaried Defined Benefit Life Insurance Plan
In September 2013 we amended the U.S. salaried life insurance plan effective January 1, 2014 to eliminate benefits for retirees and
eligible employees retiring on or after August 1, 2009. The remeasurement, settlement and curtailment resulted in a decrease in the
OPEB liability of $319 million, a decrease in the net pre-tax actuarial loss component of Accumulated other comprehensive loss of
$236 million and a pre-tax gain of $83 million.
U.S. Salaried Defined Benefit Pension Plan
In the year ended December 31, 2012 we amended the salaried pension plan to cease the accrual of additional benefits effective
September 30, 2012 resulting in a curtailment of $309 million which decreased the pension liability. We divided the plan to create a
new legally separate defined benefit plan primarily for active and terminated vested participants. Settlement payments of $30.6 billion
were made consisting of lump-sum pension distributions of $3.6 billion to retired salaried plan participants, group annuity contracts
purchased for a total annuity premium of $25.1 billion and two separate previously guaranteed obligations of $1.9 billion were settled.
These agreements unconditionally and irrevocably guarantee the full payment of all annuity payments to the participants that were
receiving payments from the plan and the insurance companies assumed all investment risk associated with the assets that were
delivered as the annuity contract premiums.
Through these transactions we have settled certain pension obligations in their entirety resulting in a pre-tax settlement loss of $2.6
billion ($2.2 billion after tax) in Automotive cost of sales. The pre-tax loss is composed of existing losses in Accumulated other
comprehensive loss of $377 million and the premium paid to the insurance company of $2.1 billion. The tax benefit of $413 million is
composed of the statutory tax benefit of $1.0 billion offset by tax expense of $596 million primarily associated with the removal of
prior period income tax allocations between Accumulated other comprehensive loss and Income tax expense (benefit).
In the year ended December 31, 2012 we provided short-term, interest-free, unsecured loans of $2.2 billion to provide the plan with
incremental liquidity to pay ongoing benefits and administrative costs. Through December 31, 2013 contributions of $1.7 billion were
made from the $2.2 billion loans and the remaining amounts were repaid.
Active salaried plan participants began receiving additional contributions in the defined contribution plan in October 2012. Lump-
sum pension distributions in 2013 of $430 million resulted in a pre-tax settlement gain of $128 million.
Other Remeasurements
In the three months ended December 31, 2014 the SOA issued new mortality and mortality improvement tables that raise life
expectancies and thereby indicate the amount of estimated aggregate benefit payments to our U.S. pension plans’ participants is
increasing. We have incorporated the new SOA mortality and mortality improvement tables into our December 31, 2014 measurement
of our U.S. pension plans’ benefit obligations. The change in these assumptions had the effect of increasing the December 31, 2014
U.S. pension plans’ obligations by $2.2 billion.
In September 2011 a plan which provided legal services to U.S. hourly employees and retirees was remeasured as a result of our
labor agreement provisions which terminated the plan effective December 31, 2013. The negotiated termination has been accounted
for as a negative plan amendment resulting in a decrease in the OPEB liability and a pre-tax increase of $266 million in the prior
service credit component of Accumulated other comprehensive loss was amortized through December 31, 2013.
In March 2012 certain pension plans in GME were remeasured as part of our goodwill impairment testing, resulting in an increase
of $150 million in the pension liability and a pre-tax increase in the net actuarial loss component of Accumulated other comprehensive
loss.
101