2009 UAW-GM Special Attrition Program - Phase II – Effective August 1, 2009
Frequently Asked Questions - Final Version as of June 9, 2009
These questions and answers related to the 2009 Hourly Special Attrition Program – Phase II and are based on the documents, policies and negotiated Agreements under which the benefits are provided. If there is any difference between the Agreements and these answers, the Agreements always will govern.
The company reserves the right to suspend, modify or terminate its plans by action of its Board of Directors or its delegate, subject to applicable collective bargaining obligations, if any. Amendments may also be made to comply with applicable statutes and regulations.
Q1. When will the Program specifics be communicated to employees?
A1. Communication packets are being mailed to employee’s home address for a Program
Initiation date as of 6-9-09.
Q2. What are the Options under the Program?
A2. Option 1
Normal or Voluntary Retirement - Effective August 1, 2009
-Normal Retirement – At age 65
-Voluntary Retirement
-With 30+ years of credited service
-Age 60 with 10+ years of credited service
-With 85 points (age plus years of credited service equals 85 or more)
Note: If an employee is not retirement eligible on July 31, 2009 but will become retirement eligible under Option 1 by December 31, 2009, he/she is eligible for Option 1 with a retirement date no later than January 1, 2010. The employee must retire the first of the month following the month they become retirement eligible.
If an employee is eligible for a voluntary retirement with 85 points on July 31, 2009 but will attain 30 years of credited service before December 31, 2009, he/she can choose to retire the first of the month following the month he/she attains 30 years of credited service but no later than January 1, 2010.
Cash payment:
Production employee = $20,000
Skilled Trades employee = $45,000
Cash Payment is subject to all applicable taxes as well as subject to court order (e.g., child support and/or alimony)
Vehicle voucher: $25,000 vehicle voucher (net value of approx. $15,500 after taxes). Employee is taxed on the voucher at the time the voucher is applied for an issued.
Option 2
Mutually Satisfactory Retirement (MSR)
Minimum of Age 50 or older with 10+ yrs credited service at all plant locations (must be eligible on or before 7/31/09) - Retirement effective date of August 1, 2009
No incentive payment or vehicle voucher
Option 3
Pre-Retirement Program
Effective 8-1-09 – Gross pay based upon credited service as of 8-1-09
28 Years of Credited service = $2,850 monthly gross pay
29 Years of Credited service = $2,900 monthly gross pay
No incentive payment or vehicle voucher
The employee must retire the first of the month following the month in which they attain 30 years of credited service.
Option 4
Voluntarily Quit
Effective 8-1-09 – sever all ties with GM and Delphi
Cash payment:
Less than 10 years of service = $45,000
10 years and less than 20 years of service = $80,000
20 or more years of service = $115,000
Cash payment is subject to all applicable taxes as well as subject to court orders (e.g... child support and/or alimony, and repayments owed to the Corporation)
Plus
Vehicle Voucher: $25,000 vehicle voucher (net value of approx. $15,500 after taxes). Employee is taxed on the voucher at the time the voucher is applied for an issued.
Q3. When does the process start?
A3. The process starts on June 9, 2009 for Program effective date of 8-1-09.
Q4. Does the 7 day revocation period begin based on date of signature on the paperwork?
A4. Yes. It should be signed and submitted on the same day.
Q5. I accepted the Pre-Retirement from the 2006 or 2008 SAP. Am I eligible to participate in the 2009 SAP?
A5. No.
Q6. If a plant is shut down temporarily and employees are on layoff during the roll out period,
how will the employees receive information on the Program?
A6. Corporate Labor Relations will mail communication packages to employees on layoff to the
employee’s address of record.
Q7. If I am on a leave of absence (sick leave, personal leave, educational leave, etc), or a temporary layoff do I need to return to active work status to qualify for this Program?
A7. No.
Q8. Are Entry Level Employees eligible for the SAP?
A8. No.
Q9. If I have unused vacation pay at the time I retire or quit, will I receive my unused vacation pay?
A9. Employees separating from General Motors under Option 1, 2 or 4 of the Phase II SAP Program will receive pay for their unused vacation time.
Q10. Can employees who retire or otherwise terminate employment under the SAP come back and work as contract, temporary or Entry Level employees?
A10. No.
Q11. An individual has a grievance on file and it is settled after the employee takes one of the options. Will the grievance settlement be paid to the employee?
A11. It is GM’s position that the execution of the SAP Condition of Participation Release Form satisfies GM’s obligations and that no grievance payments are due. In any case where the UAW prevails upon GM to secure a grievance notwithstanding GM’s position, payment will be made.
Q12. Will employees who retire on 8/1/09 be eligible for the Performance Bonus, if paid?
A12. The Performance Bonus payments are suspended for the remainder of the 2007 National Agreement (as amended).
Q13. If an individual has a suggestion submitted and they take one of the options, will they receive a suggestion award if one is deemed appropriate?
A13. The execution of the SAP Conditions of Participation Release Form satisfies GM’s obligations and no award payments are due. However, GM typically volunteers to make outstanding suggestion award payments, but this is not a waiver of its right not to make suggestion or other payments.
Q14. Is GM or the Union going to provide a notary public at the plants to allow employees to sign off on the paperwork?
A14. No.
Q15. Can key people in production stay beyond the 8/1/09 date?
A15. No.
Q16. Is a person who elects the option for a Mutually Satisfactory Retirement eligible for the Vehicle Voucher and Cash Payment?
A16. No.
Q17. Are T&PD retirees eligible for the SAP?
A17. No.
Q18. Will a participant's vacation, layoff, and sick leave time be included in determining credited service?
A18. Credited service is provided for paid vacation and certain periods of layoffs and sick leave under terms of the Pension Plan. In all cases, the Pension Plan terms control.
Q19. Am I still eligible for the one or two year relocation payment if I retire prior to the one year anniversary date?
A19. No.
Q20. If a married couple works at GM and one of them voluntarily quits with the cash payment and the other takes a retirement, can the one who quit go on their spouse’s health care?
A20. Yes.
Q21. Can employees use the Cash Payment to repay a PSP loan?
A21. Yes. When an employee retires, the PSP weekly loan repayments through payroll become monthly loan repayments via coupon books. You can use your cash payout towards those repayments.
Q22. Will Option 1 retirements have the opportunity to delay commencement of their retirement between August 1, 2009 and December 31, 2009?
A22. No. However, if an employee is not retirement eligible on July 31, 2009 but will become retirement eligible under Option 1 by December 31, 2009, he/she is eligible for Option 1 with a retirement date no later than January 1, 2010. The employee must retire the first of the month following the month they become retirement eligible.
If an employee is eligible for a voluntary retirement under 85 points on July 31, 2009 but will attain 30 years of credited service before December 31, 2009, he/she can choose to retire the first of the month following the month he/she attains 30 years of credited service but no later than January 1, 2010.
Q23. Will the Cash Payment be subject to any legal liens, levies or court orders? If so, will the Cash Payment be taken to satisfy them?
A23. Yes. The Cash Payment is subject to all legal liens and attachments. If there is such an order, GM will comply with the order. Further, the Cash Payment will be used to satisfy any overpayments due the Corporation, such as a disability overpayment. If there is no such order or overpayment, the Cash Payment will be paid (subject to all tax withholding).
Q24. There was an issue from previous SAP programs regarding eligibility for Social Security benefits. Social Security would argue over what type of payment the Cash Payment represented: wages vs. severance pay vs. retirement pay. Is there a form that can be submitted to Social Security to help?
A24. Yes. We have encountered problems with Social Security wanting to count the Cash Payment as earnings under the Social Security “earnings test." This can reduce monthly Social Security benefits. Although each employee is responsible to manage their tax issues, GM does not believe the Option 1 and Option 4 Cash Payments are earnings for this test. There is a form [Form SSA – 131] that can be sent to Social Security to explain what the payment represents. The Option 1 payment is on account of retirement; the Option 4 payment is a severance payment. GM cannot guarantee how the government will treat these payments.
Q25. Can employees have their retirement paperwork sent to their homes instead of being sent directly to the
UBR?
A25. Yes.
Q26. I will be age 49 years 10 months on August 1, 2009 and I have 20 years of credited service. Can I "grow into” a Mutual Retirement between August 1, 2009 and December 31, 2009?
A26. No, you must be at least age 50 as of July 31, 2009 to qualify for an MSR under this SAP.
Q27. Is Fidelity going to extend their Call Centers hours during this period?
A27. No.
Q28. Is my Cash Payment from GM subject to employment taxes and withholding?
A28. Yes. All applicable employment taxes (federal, state, local and FICA) will be withheld. Federal income tax will be withheld at a flat 25%; however, employees should consult with their tax advisor to determine the tax impact. These will be reported on your Form W-2 for 2009.
Q29. If I have not yet earned a year of credited service for 2009 by August 1, 2009, can I use my unpaid vacation towards my credited service for 2009 in order to reach 30 years for Option 1?
A29. Vacation hours that are paid are counted towards your total credited service. Only credited service recognized under the GM Hourly Pension Plan is counted.
Q30. If I take Option 4 and voluntarily quit, at what age will I be able to start receiving my vested pension benefits?
A30. If a person is already retirement eligible at the time they take the buyout (i.e., 30 and out, 85 points or 60 & 10) they can begin receiving their benefit as soon as they wish to initiate. However, if they are not otherwise eligible and they are vested with at least 5 years of credited service, the earliest they may receive the deferred vested benefit is at age 55 (which is reduced for age). If they want to receive a deferred vested benefit unreduced for age, then they would have to wait until age 65. Remember that a deferred vested pension does not include eligibility for Health Care, Life Insurance or Pension Plan supplements. Please refer to plan documents or work with the UBR if you have questions about this.
Q31. Why is Delphi mentioned or included in this package?
A31. Although we have split from Delphi, we want to avoid any misunderstandings about contractual obligations relative to employee flowback and other commitments. We need to be sure it is understood that you would be severing all ties and claims with both GM and Delphi.
Q32. Can I have PSP deductions taken from my Cash Payment?
A32. No.
Q32. Can employees on permanent layoff sign up and retire under the program?
A32. If they are otherwise eligible – yes.
Q33. When may I expect to receive my Cash Payment under Option 1 or Option 4?
A33. Generally, 4 to 6 weeks following date of retirement or separation.
Q34. If an employee was already in process for an 8/1/09 voluntary retirement before this
Program was announced, can they participate in the Program?
A34. Yes, but they must complete Forms A & B to sign up for this Program – Phase II. They should contact their plant Labor Relations activity to sign up. The cut-off date for signing up for the Program is July 24, 2009.
A35. Are there “retro retirees” eligible for this SAP program.
A35. Yes. Those retirees who are currently receiving a pension for a retirement date that was effective 2-1-09 or later and were not part of any previous SAP Program are eligible to sign up for this program.
Q36. If an employee signs up for the SAP under Option 1 or Option 4, but dies before they separate from GM,
will the surviving spouse/estate still receive the cash payment and $25,000 vehicle voucher?
A36. If the employee signs up for Option 1 and has met all the eligibility requirements for retirement on August 1, 2009 and dies before August 1, 2009, their surviving spouse/estate will be eligible to receive the Cash Payment and the vehicle voucher. However, if an employee signs up for Option 1 but is “growing” into eligibility and dies before they meet the eligibility requirements to retire, they are considered an “in-service” death and no payments will be made to the surviving spouse or the estate. The same is true for an Option 4 employee who dies before August 1, 2009, they are considered an “in-service” death and no payments will be made to the surviving spouse or the estate.
Q37. If an employee signs up for the SAP under Option 1 or Option 4 and dies after their retirement date or date of separation but before the payment is made, can the payment still be made to the survivor or to the estate?
A37. Yes. If the person dies after commencing retirement under Option 1 or after separating under Option 4 and has not yet received the Cash Payment or vehicle voucher, their surviving spouse or estate will be eligible for the Cash Payment and the vehicle voucher.
Q38. Will the employees that elect the Pre-Retirement Program receive an increase to whatever the “30 and out”
retirement pays at the time the employee retires?
A38. Employees on Pre-Retirement leave will receive whatever pension benefit is payable under the contract language that is in effect at the time to retirement.
Q39. If I elect the Pre-Retirement Program, am I considered an active or retired employee for benefit purposes?
A39. Your benefits will be the same as an active employee except you will not be eligible for COLA or vacation accrual and you will receive the same reduced hourly rate as of the first date you started the program until you reach 30 years of credited service. You will receive your pay weekly on an hourly basis based on 2080 hours per year.
Q40. Is an employee on the Option 3 Pre-Retirement Program leave eligible for vacation?
A40. No.
Q41. Will State and Federal taxes and FICA be taken out of the Pre-Retirement hourly pay?
A41. Yes.
Q42. If I sign-up for the Pre-Retirement Program, can I still work in the plant?
A42. No.
Q43. Are Union dues coming out of the pre-retirement pay?
A43. Yes. The 2 hours of pay per month is based upon the reduced wage rate paid for the Pre- Retirement status.
Q44. If I elect the Pre-retirement Program, is my health care covered?
A44. Yes, on the same terms as an active employee.
Q45. If an employee signs up for the Pre-Retirement Program and dies while on the Program, what is the
surviving spouse entitled to receive?
A45. Employees who are on Pre-Retirement Program are considered active. As such, they are treated the same as if they were working for the purposes of determining eligibility for benefits for the beneficiaries of deceased employees.
Q46. If I elect the Pre-Retirement Program, may I continue to contribute into my PSP?
A46. Yes.
Q47. If I choose the Pre-Retirement Program, which contract do I retire under?
A47. The contract that is in force at the time that you actually attain 30 years of credited service.
Q48. If an employee chooses Option 3 and during the grow-in period is diagnosed with a terminal condition will
the employee be able to retire as T&PD?
A48. Employees on Option 3 are considered active; they can apply for S&A, EDB and T&PD.
Q49. Would an employee who is on EDB (and receiving SSDIB) be eligible for Option 3?
A49. He would have to come off of EDB to go out on Option 3.
Vehicle Voucher – Taxation issues
The following questions and answers are related to payroll tax questions associated with vehicle vouchers granted under the 2009 UAW-GM Special Attrition Program – Phase II. The employee will have taxes taken out of the $25,000 voucher (tax withholding) and the remainder after tax withholding ($15,500) will be available to the employee to purchase a new vehicle. The amount of taxes withheld will be paid to the IRS as withholding taxes on behalf of the employee. If the voucher is never applied for and issued, there will be no tax liability.
All employees should be aware that the vehicle voucher will be taxed in the year in which the voucher is applied for and issued regardless of when the voucher may be used.
Q1: When will the $25,000 vehicle voucher be taxed?
A1: The voucher will be taxed at the time the voucher is applied for and issued during the 18 month eligibility period.
Q2: What impact will tax withholding have on the value of the voucher?
A2: The tax withholding will be subtracted from the value of the voucher when it is applied for and issued. We have determined that the net value of the vouchers, after required tax withholdings, will be $15,500. Therefore, the $25,000 voucher will be reduced to satisfy the tax withholding obligations (Federal, FICA, state and local) in an amount equal to $9,500, resulting in a net value of $15,500 that may be applied to the purchase of a new vehicle. These amounts will be reported on your Form W-2 for the year the voucher is applied for and issued.
Q3: What is the impact to the value of the vehicle voucher when taxed?
A3: As mentioned above, the tax impact for an employee using the entire $25,000 is $9,500 (Federal, FICA, state and local) resulting in a vehicle voucher with a net value of $15,500. This amount, $9,500, will be withheld from all Program participants who are issued a vehicle voucher, and paid to the IRS to satisfy tax withholding obligations.
Q4: Can more than one vehicle be purchased using the vehicle voucher?
A4: Yes. You may purchase up to 5 vehicles using the voucher in $3,100 increments.
Q6: Might I still owe some taxes when I file my tax returns for the year?
A6: Based on your individual tax situation, you may receive a refund or owe additional taxes when you file your tax returns for the year.
Q7: If I never apply for the voucher, will I still have to pay taxes on it?
A7: No.
Q8: If I only use a part of the voucher will I be taxed on the whole amount?
A8: No. You will only be taxed on what you apply for.
Q10: What about the $20,000 cash I will receive?
A10: It will be taxed and the after-tax amount will be paid at the time the employee quits or retires. That is separate from the transaction with the voucher.
Q11: Can you show a calculation showing the tax impact on the value of the cash and the voucher?
A11: See calculation below:
Cash Payment $20,000
Withholding 7,500
Net Cash $12,500
Vehicle Voucher $25,000
Withholding 9,500
Net Voucher $15,500
Total Net Cash $28,000
And Voucher
Process for Obtaining an Authorization Number using $25,000 Vehicle Voucher
Access GM Family First (www.gmfamilyfirst.com)
Sign into GM Family First with your user number and password. If you have not yet established a user
Number and password, you must do so before proceeding.
Click on “$25,000 Vehicle Voucher Program” on the left navigation panel on the home page.
You will be asked to provide the following:
· Purchaser’s Date of Birth
· Purchaser’s Zip Code
· Purchaser’s Relationship – For a purchaser other than a family member listed in the drop down box, use “Prospect”
Next, you will need to “Accept the Terms and Conditions”. This is required and will have a link to the Terms and Conditions of the $25,000 Vehicle Voucher Program that clearly detail the tax implications.
Provide the following information:
· Authorization Amount – A drop down box will have appropriate option amounts for you to choose. The options will change as you use all or part of the Voucher amount.
· Purchaser’s First Name
· Purchaser’s Last Name
· Purchaser’s Address
· Purchaser’s City
· Purchaser’s State
Depending upon the amount of the Vehicle Voucher, you can request up to five authorizations under the $25,000 Vehicle Voucher Program. Any combination of $3,100 increments that do not exceed $25,000 will be accepted.
