GM SSPP and PSP Plans  
 

GM Plan Review as of November 1, 2009

Introduction
With close to 40 investment options available, the Savings Stock Purchase Program (SSPP) 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 401(k) savings.

In this page of the website we include some “Featured Funds” within the General Motors 401(k) plans. At the bottom of this page, we provide a table containing many of the funds available within the SSPP and PSP plans with critical data on each fund including style, risk, and past performance. Throughout the page we provide other pertinent information concerning the plan and links to other areas of our website that may be of interest.

Check this page for future updates to the SSPP and PSP plans as well as news that affects General Motors.

GM Reinstates Matching for SSPP Participants - October 2009
In the past several years GM has instated, adjusted, and suspended the SSPP 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 Contributions are pre-tax, grow tax deferred and are withdrawn tax-free for medical expenses.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.

SSPP 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)

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

  GM SSPP 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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