GM retirees sue for lost pension benefits

More than 100 General Motors executive retirees have sued the company for failing to pay pension benefits after the automaker’s historic bankruptcy in 2009.

The lawsuit states that GM's pension plan administrator wrongly rejected retirees’ claims for a higher payout. Plaintiffs are seeking to recover millions of dollars in lost benefits in addition to interest and legal fees.

To reduce benefits after bankruptcy, GM is combining salaried retirement benefits with a separate benefit given to executive retirees. In court filings, the plaintiffs’ lawyers claim that under the modified retirement plan, only benefits of more than $100,000 a year are to be reduced, and not benefits under $100,000.

Defending the company, spokesman James Cain said in an email, “Sacrifices were made by every stakeholder, including former executives, to create a foundation upon which the new GM can thrive.” He said that the claims were “properly considered,” though denied.

Plan administrator Janice K. Uhlig said that GM properly accounted for life-annuity reductions under the U.S. bankruptcy code and she said she “has the discretionary authority to construe, interpret, apply and administer” the retirement plan.

The retirees are facing an uphill battle, because even if the GM ruling was wrong, it can stand in court if it was not "arbitrary and capricious," according to a Michigan business law expert.

According to the lawsuit, the executives suing GM include former design chief Wayne Cherry, former head of Asia Pacific Rudolph Schlais Jr, former Saturn boss Donald Hudler, and former sales chief John Middlebrook.

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