Government probably will have to assume pension obligations. Here's the rub: in case of Chapter 11 company can cancel pension plan and government pension fund accepts part of pension obligations. Hard on people, they lose about 50% of their pensions, but reasonable for the government. In proposed scenario, bankruptcy law doesn't apply, so how pension obligations are treated? I don't think gov can (and should) assume pension obligations at 100%. BTW, GM (and Ford, and Chrysler) pension fund is underfunded by billions of dollars.
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Government probably will have to assume pension obligations. Here's the rub: in case of Chapter 11 company can cancel pension plan and government pension fund accepts part of pension obligations. Hard on people, they lose about 50% of their pensions, but reasonable for the government. In proposed scenario, bankruptcy law doesn't apply, so how pension obligations are treated? I don't think gov can (and should) assume pension obligations at 100%. BTW, GM (and Ford, and Chrysler) pension fund is underfunded by billions of dollars.
Nov 17 16:35 pm
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All Comments by Alex Filonov »GM: An Alternative to Bankruptcy [View article]