Letter From GM Concerning PBGC

January 8, 2010

Dear Hourly GM/Delphi Retiree or Surviving Spouse:

We have been informed that you recently received a letter from the Pension Benefit Guaranty Corporation (PBGC) informing you that your Delphi pension benefit, paid by the PBGC, will be reduced to a PBGC estimated benefit level effective February 1, 2010.

We are writing to inform you that you have been identified as a “Covered Employee” under the Benefit Guarantee between General Motors, the UAW, the IUE-CWA or the USW.  Under the Benefit Guarantee, GM has agreed to provide supplemental pension payments to retired Covered Employees, which, when combined with any pension benefits received:

• from a pension plan sponsored by Delphi, any of its subsidiaries or affiliates or any successor company(ies), and/or
• from the Pension Benefit Guaranty Corporation (PBGC), and/or
• from a pension plan sponsored by GM,

would result in the retired Covered Employees receiving pension benefits equal to those called for in the Delphi-UAW, Delphi-IUE-CWA or Delphi-USWA Agreement applicable at the time the Delphi Hourly-Rate Employees Retirement Plan (HRP) benefit was reduced or terminated.

This means that the GM Hourly-Rate Employees Pension Plan (GM HPP) will “top up” the pension benefit payment you receive from the PBGC, to the pension payment amount you would have received under the Delphi HRP provisions at the time that plan was terminated.  We are planning that your initial top up payment will be paid in early February and that in future months your top up benefit will be paid on the first of the month along with any other GM HPP payments.

Your letter from the PBGC also stated that their review of the Delphi HRP and the impact on your final PBGC benefit can take several years.  Therefore, we have been informed that your PBGC estimated benefit may change over time.  As a result your GM HPP top up benefit may also change to continue to provide you a combined pension payment equal to the pension payment you would have received under the Delphi HRP provisions. 

Finally, as we’ve previously communicated, the PBGC will only withhold federal income tax, levies and liens and deductions for Qualified Domestic Relations Orders (QDROs) from any payments they make.  To the extent that there are sufficient funds available, deductions which you had from your combined GM/Delphi pension benefit will continue to be withheld from the GM portion of your pension payment.  Medical and/or Life Insurance coverage will continue without interruption. See below for specific details.

Federal/State Taxes
Federal and State taxes will be withheld from your GM pension payment based on your prior elections for marital status and number of allowances.  If, after you receive your January 2010 GM portion of your pension payment, you would like to make changes to your Federal or State tax elections, please go online to gmbenefits.com or contact the GM Benefits and Services Center to request such changes.

QDROs, Levies, Liens and Garnishments

Deductions associated with QDROs, Levies, Liens and Garnishments will continue to be deducted from your GM pension payment in accordance with such direction.

UAW Retiree Health Care
Starting in January 2010, retirees and surviving spouses eligible for Health Care coverage from the UAW Retiree Medical Benefits Trust (the “Trust”) will see their monthly Health Care deductions withheld from the GM portion of their pension payment, to the extent that sufficient funds are available.  If sufficient funds are not available, a monthly bill from the Trust will be sent in early 2010.  Starting in January 2010, if you have any questions about Trust coverage, you can call Retiree Health Care Connect at 1-866-637-7555.

GM Health Care (for eligible non-UAW retirees and surviving spouses)
If there are insufficient funds in your monthly GM pension payment for Health Care deductions, you will be switched to direct bill and will begin to receive a monthly invoice for your contributions.

GM Life Insurance
If there are insufficient funds in your monthly GM pension payment for Life Insurance deductions, you will be switched to direct bill and will begin to receive a monthly invoice for your premiums. At that time you will have the ability to sign up for electronic funds transfer from your checking account to pay for your premium.

GMAC Demand Notes

If there are insufficient funds in your monthly GM pension payment for GMAC Demand Notes deductions, you may contact the Demand Notes Services Center at 1-800-684-8823.

Union Dues and Union Political Action Deductions

GM is working with the UAW and IUE-CWA regarding deductions associated with Union Dues and/or Political Action contributions in the event that there are insufficient funds available in your monthly GM pension payment for such contributions.  There will be future communications regarding these deductions.            

If you have any questions regarding this letter, please contact the GM Benefits and Services Center at 1-800-489-4646.

General Motors