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Pension Lump Sum Special Report

"Guide to the New RSP and PSP"

Auto Stock Research Report

GVUL Model Portfolios

GM HSA Model Portfolios

GM HSA Investment Menu Change

New Options in the GM Roth 401(k) (Special Report)

GM Salaried Life Insurance Transition

Funding Health Care Costs After Age 65

For Your Interest

ABC News Video:"Automotive workers seek advice on buyouts"

Associated Press
Old GM shares drop in value with symbol change

Oakland Press
GM emerges from bankruptcy; analysts optimistic about future

Dow Jones Newswires
Adviser Fights Fear About GM With Fact

The Wall Street Journal
Getting Personal: Financial Planning Before The Buyout

Introduction

With over 30 investment options available, the Retirement Savings Plan (RSP) for salaried employees and Personal Savings Plan (PSP) for hourly employees are among the best in the country. With this large number of funds, there is ample opportunity to build a well-diversified portfolio for your GM 401k savings.

For your reference, we have provided a fund table displaying style, risk, and past performance for many of the funds in the RSP and PSP plans. In addition, please visit our “Fund Commentary” section below for further information on specific funds and/or fund types within the RSP and PSP accounts.

To the right you will find articles of interest as well as news and updates to General Motors employee and retiree benefits. Check this page for future updates to the RSP and PSP plans, as well as news that affects General Motors employees and retirees.


News and Updates

RSP & PSP Fund Line-Up Changes – February 2014

General Motors has announced changes that will impact the GM Retirement Savings Plan (RSP) and Personal Savings Plan (PSP) (“the Plans”). The changes will take place in early April 2014.

The target date funds are moving from Pyramis Active Lifecycle Funds to State Street Global Advisor Target Retirement Funds, one fund is changing share class, and one fund is being eliminated from the Plans.

To discuss these important changes to the GM 401(k) plans and how to allocate your portfolio in light of the new investment menu, do not hesitate to contact us toll-free at 1‑866‑444‑6246.

GM HSA Fund Change Announcement – May 2013

General Motors has announced changes to the fund lineup in the Health Savings Account (HSA). These changes impact various mutual funds in the HSA, effective as of the close of business on June 17, 2013. For some participants, if no action is taken, your automatic investment feature may be turned off.

If you have questions regarding how these changes may affect your portfolio or your investment option selection within the GM HSA, don't hesitate to contact Mainstay toll-free at 1‑866‑444‑6246.

RSP & PSP Fund Change Announcement – April 2013

General Motors has announced upcoming investment option changes for the Retirement Savings Plan (RSP) and Personal Savings Plan (PSP). The new investment options will provide similar investment strategies and risks, but the overall expenses for the investment options will be lower. These changes will be effective as of the close of business on May 24, 2013. Contact Mainstay toll-free at 1‑866‑444‑6246 to discuss the impact these changes may have on your portfolio.

GM Salary teamGM and RSU Payout – February 2013

GM salaried employees that are eligible under the teamGM Performance Plan (formerly EVP) may defer up to 100% of their teamGM payout on a pre-tax basis only, to the RSP in 1% increments. After-tax contributions, including the Roth 401(k), are not allowed under the teamGM Performance Plan.

Any amount of the teamGM Performance Plan payout that is deferred to the RSP will be combined with the pre-tax and Roth contributions already made this year. The annual IRS limit on these pre-tax and Roth contributions for 2013 is $17,500 (or $23,000 if age 50 or older). It is important to remember that contributions, up to 4% of eligible pay for salaried employees, are matched by GM per pay period. Therefore, in order to maximize the company’s matching contribution, it is essential to elect at least a 4% payroll contribution throughout the year. Participants can continue to contribute to the RSP in order to take advantage of the company match even after the pre-tax limit has been reached.

For those eligible executive level employees under the General Motors 2009 Long-Term Incentive Plan (the "Plan"), GM granted Restricted Stock Units (RSUs) on March 15, 2010. The awarded RSUs become unrestricted on March 15, 2013. If you are eligible under the Plan, there are several tax implications to consider upon payment of the RSUs. Importantly, a tax optimization strategy should be incorporated into your financial plan.

Those receiving RSUs also need to consider what impact this holding may have on their current investment strategy and portfolio diversification. A comprehensive review of your tolerance for risk, time horizon, and investment goals may be in order to successfully integrate this award within your overall investment portfolio.

If you have questions on the teamGM Performance Plan payout or the Restricted Stock Units, contact Mainstay Capital Management toll-free at 1-866-444-6246 to speak with one of our Certified Financial PlannersTM.

GM Separation Package – January 2013

General Motors has announced a new Skilled Trades Special Attrition Program (SAP) that will be offered to thousands of GM employees. The decision to accept any buyout offer requires careful analysis and planning.

For those evaluating a buyout offer, there are important factors to consider:

  • Am I financially ready to go?
  • Have I developed a comprehensive Retirement Income Plan?
  • How will the SAP impact my retirement plan?
  • Are my investments allocated appropriately for this life event?
  • What should I do with the assets in my 401(k)?

Mainstay Capital Management is a fee-only, independent investment advisor that has counseled hundreds of GM employees on buyout offers. Mainstay currently provides portfolio management and retirement planning services to thousands of active and retired GM employees. We can provide a comprehensive Retirement Income Analysis, help evaluate "what-if" scenarios, and assist in making informed decisions concerning any buyout offer.

Call Mainstay Capital Management toll-free 1‑866‑444‑6246 to discuss your personal situation with a Retirement Planning Specialist.

GM Offers Lump Sum Payments to Retirees – June 2012

General Motors has announced additional changes to its pension plan that will impact 118,000 salaried retirees, with 42,000 being offered a lump sum payment option. These GM retirees must choose among three options by July 20, 2012.

GM salaried retirees who retired between October 1, 1997 and December 1, 2011 are being provided a lump sum payment offer of their pension benefits. These retirees may:

  1. Take their pension benefit as a lump sum payment
  2. Continue to receive their current monthly pension payment (payable by Prudential Insurance)
  3. Choose a new form of their monthly pension benefit based on the lump sum valuation

Retirees not offered a lump sum will continue to receive their current monthly pension benefit, which will be paid by Prudential Insurance after GM’s current pension program is terminated. GM previously announced that current employees will have the lump sum pension payment option available to them at retirement, effective July 1, 2012.

By taking advantage of the lump sum pension payment option, current and future GM retirees may reduce many potential pension risks including longevity risk due to inflation, tax risk, and mortality risk. Most importantly for current employees, at retirement it will completely eliminate "PBGC risk" - the risk that monthly pension payments are someday reduced by the Pension Benefit Guaranty Corporation.

Visit our “In The News” section to review the articles discussing pension lump sum payments or call Mainstay toll-free at 1‑866‑444‑6246 to discuss your personal situation. If you are a member of a GM retiree group that is impacted by this change, and would like to inquire about or schedule a free educational workshop regarding pension payment options and other retirement planning topics, contact us soon as the deadline to make a decision on these options is fast approaching.

GM Modifies Salary Pension Program – February 2012

General Motors announced several key changes to the salaried employee pension program, or Salaried Retirement Program (SRP), and the salaried employee 401(k) plan, or Retirement Savings Plan (RSP).

Effective September 30th, GM is freezing the SRP for employees hired on or before January 1, 2001. Any pension benefits accrued to this date will be fully vested. GM is also modifying the SRP to have the option of a lump sum payout of these accrued benefits upon retirement.

In lieu of any further accrued pension benefits, GM will make a “Retirement Contribution” of either 4% or 6% per pay period directly to an employee’s RSP. These contributions will be based on an employee’s date of hire. The Retirement Contribution will be made regardless of whether or not an employee contributes to their RSP. In addition to the Retirement Contribution, GM will continue to match dollar for dollar up to 4% of employee contributions.

If you have questions about these upcoming changes or how your personal retirement plan may be impacted, contact us toll-free at 1‑866‑444‑6246 to speak with one of our Certified Financial PlannersTM.

GM Salary Enhanced Variable Pay (EVP) – February 2012

GM salaried employees that are eligible under the Enhanced Variable Pay (EVP) may be deciding how much, if any, of the potential EVP payout to contribute to their Retirement Savings Plan (RSP). Eligible participants may defer up to 90% of their EVP payout on a pre-tax basis only, to the RSP in 10% increments. After-tax contributions, including the Roth 401(k), are not allowed under the EVP. There is a very short window to make a deferral election. If no action is taken by the 5:00 PM EST deadline on February 21st, employees will receive their entire EVP payment in cash.

Any amount of the EVP payout that is deferred to the RSP will be combined with the pre-tax and Roth contributions deferred to the plan throughout the year, including those contributions already made this year. The IRS limit on these pre-tax and Roth contributions for 2012 is $17,000 (or $22,500 if age 50 or older).

It is important to remember that contributions, up to 4% of eligible pay for salaried employees, are matched by GM per pay period. Therefore, in order to maximize the company’s matching contribution, it is essential to elect at least a 4% payroll contribution throughout the year. Participants can continue to contribute to the RSP in order to take advantage of the company match even after the pre-tax limit has been reached.

If you have questions on how the election of the EVP to the RSP could impact your contributions for the remainder of 2012, or you want to maximize GM’s company match, contact Mainstay Capital Management toll-free at 1‑866‑444‑6246 to speak with one of our Certified Financial PlannersTM.

GM Profit Sharing Payment – February 2012

General Motors has announced that in the event of a payout under the Profit Sharing Plan for Hourly-Rate Employees, GM-UAW represented employees will have the option to have a portion (up to 100%) of the Profit Sharing payment contributed to their Personal Savings Plan (PSP). There is a very short window, ending on February 7, 2012, in which employees may elect their desired percentage to defer. If no action is taken, employees will receive their entire Profit Sharing payment in cash.

It is important to keep in mind that the IRS limit for pre-tax contributions cannot exceed $17,000 (or $22,500 if age 50 or older) for 2012. However, contributions can still be made to the PSP after reaching the $17,000 threshold. Your weekly contributions will automatically spill over as after-tax once the pre-tax limit is reached. There is a total contribution limit of $50,000 (or $55,500 if age 50 or older) for 2012.

If you have questions on how much of the Profit Sharing payment you should contribute to the PSP relative to your personal situation or how the election of the Profit Sharing payment to the PSP could impact your contributions for the remainder of 2012, contact Mainstay Capital Management toll-free at 1‑866‑444‑6246 to speak with one of our advisors.

RSP & PSP Fund Change Announcement – January 2012

General Motors has announced a change in the share class of the Ariel Fund in the Retirement Savings Plan for salaried employees and the Personal Savings Plan for hourly employees. This change will impact the Ariel Fund in the savings plans effective as of the close of business on February 6, 2012. The new share class for the Ariel Fund (ARAIX) will provide the same investment strategy and risk, but the overall expenses for the fund will be lower. Although the fund code and ticker symbol will change for this investment option, there will be no other material change, with the exception of the lower expense ratio.

Mainstay Capital Management’s CEO, David Kudla, has spoken and is published on the subject of reducing fees (internal expense ratios) for investment options within 401(k) plans. To read his article penned for Forbes, "Why Investment Choices In Your 401(k) Might Change", visit Mainstay’s "In the News" page.

If you would like more details or have questions about how this share class change could impact your portfolio, contact Mainstay Capital Management toll-free at 1‑866‑444‑6246.

GM Separation Package – Phase II – October 2011

General Motors is again offering a 2011 Special Attrition Program (SAP) to thousands of employees. The decision to accept any separation program requires careful analysis and planning on the part of each employee.

For those evaluating a buyout offer, there are important factors to consider:

  • Am I financially ready to go?
  • Have I developed a comprehensive Retirement Income Plan?
  • How will the SAP impact my retirement plan?
  • Are my investments allocated appropriately for this life event?
  • What should I do with the assets in my 401(k)?
  • Which distribution method for pension benefits is best suited for my personal situation?

Mainstay Capital Management is a fee-only, independent investment advisor that has counseled hundreds of GM employees on buyout offers. Mainstay currently provides portfolio management and retirement planning services to thousands of active and retired GM employees. We can provide a comprehensive Retirement Income Analysis, help evaluate "what-if" scenarios, and assist in making informed decisions concerning any buyout offer.

Call Mainstay Capital Management toll-free 1‑866‑444‑6246 to discuss your personal situation with a Retirement Planning Specialist.

RSP & PSP Fund Change Announcement – June 2011

General Motors has announced upcoming investment option changes for the Retirement Savings Plan (RSP) and Personal Savings Plan (PSP). Several existing investment options will be removed from the plans and new options will be added. The transition to the new fund lineup will start at the close of business July 15, 2011 and come to an end August 26, 2011. If you have questions about how this new fund lineup could impact your portfolio, contact Mainstay Capital Management toll-free at 1‑866‑444‑6246.

GM Salary Enhanced Variable Pay (EVP) – January 2011

General Motors salaried employees that are eligible under the Enhanced Variable Pay (EVP) Plan may be trying to decide how much, if any, of the potential EVP payout to contribute to their Retirement Savings Plan (RSP). Participants are eligible to defer up to 80% of their EVP payout on a pre-tax basis (not Roth or after-tax) to the RSP in 10% increments.

It is important to remember that any amount of the EVP payout that is elected to be deferred to the RSP will be combined with the pre-tax and Roth contributions that are deferred to the plan throughout the year. The limit on these contributions for 2011 is $16,500.

Contact Mainstay Capital Management toll-free at 1‑866‑444‑6246 to speak with one of our Certified Financial PlannersTM to discuss how deferring a portion of your potential EVP payout would impact your personal situation.

GM Salary 401(k) Plan Name Change – January 2011

Effective January 1, 2011 the GM Savings Stock Purchase Program (SSPP) was renamed to the GM Retirement Savings Plan (RSP). Communications and plan literature will be updated accordingly.

GM Separation Package – December 2010

General Motors is offering a 2011 Skilled Trades Special Attrition Program (SAP) to skilled trades employees at 13 of their U.S. facilities. The decision to accept any separation program requires careful analysis and planning on the part of each employee.

New Options Available in Roth 401(k) Account – November 2010

General Motors is offering their RSP and PSP 401(k) participants access to two new features in the Roth 401(k) account currently available within these plans.  Effective November 1st, a new distribution feature allows a participant to make withdrawals directly from their Roth 401(k) account without having to first pull from their traditional 401(k) savings plan account. Also, effective December 1st, a participant can convert qualified distributions from their traditional 401(k) savings plan account into their Roth 401(k) account. Any amounts converted to the Roth 401(k) are taxable, with the exception of after-tax contributions. Conversions processed before December 23, 2010 can defer any tax liability owed over the next two years. For more details, refer to our Special Report “New Options Available in the GM Roth 401(k) Account”.

GM Reinstates Matching for RSP Participants - October 2009

In the past several years GM has instated, adjusted, and suspended the RSP company match several times. On October 1, 2009 GM once again reinstated the company match. The match is $1.00 for each dollar you contribute up to 4% of your eligible base salary. This is calculated as 4% of your base pay for each pay period. GM will match any pre-tax, post-tax, or Roth contributions. There is no match on catch-up contributions. Mainstay recommends that all GM salaried employees are contributing at least 4% in order to take advantage of the reinstated company match.

GM’s Health Plans in 2010 will be HSA Qualified – October 2009

In 2010, GM's health care plans become Consumer Driven Health Plans (CDHP) that are Health Savings Account (HSA) qualified. An HSA is a great tax-advantaged way for participants to save money. Contributions are pre-tax, grow tax deferred and are withdrawn tax-free for medical expenses. Starting in 2010 GM will open an HSA for each salaried employee and make a $1,300 contribution. If you do not intend to immediately use the funds in your HSA, you may want to consider investing these funds utilizing our suggested investment allocation. For additional information on the HSA and our suggested model portfolios, visit our special report titled Heath Savings Accounts.

RSP Roth and PSP Roth

The Roth feature within a 401(k) plan allows employees to “tax diversify” their income sources for retirement. Employees have the flexibility to direct contributions among both types of 401(k) accounts as their current and future tax situation dictates. Additionally, for those GM employees who are ineligible for a Roth IRA, a Roth 401(k) provides an opportunity to build a tax-free retirement income source.

We applaud GM for taking advantage of this provision in the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). For any questions on this development in the GM 401(k) plan, feel free to call Mainstay Capital Management toll-free at 1‑866‑444‑6246 or send email to Mainstay@mainstaycapital.com.

Request a free copy of Mainstay Capital Management’s “GM and Delphi Roth 401(k) Investment Guide”

Roth 401(k)s - Frequently Asked Questions

Mainstay "In The News" On The GM and Delphi Roth 401(k)


Fund Commentary

Pyramis Active Lifecycle Funds

The Pyramis Active Lifecycle fund family (Pathway One) is designed for those participants who wish to base their asset allocation decision on a specific target date, typically aligning the account with the fund that most closely matches their projected retirement date.

Eleven of these funds are included in the new plan, with 5-year incremental targets from 2000 to 2050. The further away the target date, the more aggressive the asset allocation. Conversely, the closer the date, the greater the emphasis on preservation of capital in the asset allocation.

Lifecycle funds hold some appeal in that they are simple to explain and administer. While this approach is unique, we believe the asset allocation decisions provided by these funds are crude at best. Lifecycle funds attempt to make decisions about asset allocation based solely on a target date. An investor’s tolerance for risk and financial goals are other key factors that should largely play a role in determining investment strategy and asset allocation. Additionally, they leave no room for the fund manager to tactically adjust the strategy based on specific opportunities within the financial markets or in response to prevailing market conditions.

The returns realized in these commingled vehicles are diluted by a rigid adherence to mechanical allocation parameters. These parameters may prove to be shortsighted and inappropriate for everyone participating in the pool. The real world changes every day, yet proponents of lifecycle funds expect someone to stick to a single game plan for as much as 40 years, whether interest rates are rising or falling, or whether the economy is in expansion or recession. While lifecycle funds offer a simple one-stop-solution, we continue to advise participants to avoid lifecycle funds and retain the flexibility to proactively adjust their portfolios as needed.

A Note on Institutional Funds

One theme in the new RSP and PSP is the use of institutional funds in place of retail mutual funds. Here the plan architects are moving to investment options with lower internal operating expenses. (Institutional funds do not have the marketing costs associated with retail mutual funds that are ultimately passed along to the shareholders in the form of fund management expenses.) The problem with institutional funds, however, is the lack of publicly available information about the funds that is so readily available for retail mutual funds through the fund family’s website or other data retrieval services. This was one of the drawbacks of the Promark funds as investment options in the RSP and PSP. As with the Promark funds, because of the lack of publicly available information, the institutional funds within the plan are not detailed in our Fund Tables.


Fund Table - December 31, 2013

The General Motors RSP and PSP fund table provides critical data on investment options within the plan.

  GM RSP and PSP - Fund Table                                                                                 


If you have any questions concerning our website or your GM 401(k) account, please feel free
to contact us using the following email link: Mainstay@mainstaycapital.com
or call us toll-free at 1-866-444-6246.

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