Wichita Business Daily

how would someone who worked for General Motors pull out their pension money prematurely?

my friend worked for General Motors and would like to pull out her pension money before they belly-up.

Public Comments

1. Isn't there a benefits department she can call about that? I wonder if the line will be busy with all the other people trying for the same thing. I feel for all the people being affected by the economy (all of us, pretty much). My husband lost his job with Dell back in Feb and we STILL haven't recovered.
2. Private sector US retirement plans can be divided into two types: Defined benefit and defined contribution plans A defined benefit plan is the traditional pension plan where you work for an employer for a long time and when you retire you are granted an income for life based on some formula. A defined contribution plan is a plan where you and the employer make contributions that go into an account that is invested and then paid out to you at retirement. The most common form is commonly called a 401(k). It is hard to get an early distribution from a defined benefit pension plan. These are designed to pay life incomes and generally do not allow participants to take lump sums, although many plans have some form of lump sum option (especially for small benefit amounts). Note that any benefits in such a plan at GM are guarnateed by a government agency called the Pension Benefit Guarantee Corporation, who will pay your benefit even if GM is no longer around. Defined contribution plans generally make it easy to withdraw you money after you quit. They are holding an account in your name which you should be able to either withdraw or roll-over to an IRA. Do not do this lightly, however, because you could be subjecting yourself to serious tax penalties. Besides, Defined contribution plan funds do not depend at all on the financial condition of the plan sponsor.