The PBGC today said hedge fund Cerberus Capital Management would not be responsible for any pension liabilities associated with its purchase of General Motors Acceptance Corp., the financing unit of General Motors Corp., Detroit, according to an SEC filing today.
In a letter to Cerberus, the Pension Benefit Guaranty Corp. said it would not take action under ERISA to terminate GM's pension plans, which have a combined $95 billion in assets, even if GM can't meet its future pension obligations, or force Cerberus to take on its pension liabilities. Cerberus leads a consortium that plans to buy a 51% stake in GMAC, said GM spokeswoman Toni Simonetti. The sale, which is valued around $14 billion, was announced in April.
GM's U.S. hourly and salaried pension plans were overfunded by $7.5 billion as of Dec. 31, according to the company's annual report. GM requested that the PBGC assure Cerberus that it would not be responsible for any pension liabilities, Ms. Simonetti said. Cerberus agreed to go forward with the sale only with that assurance from the PBGC.
GM plans to use the sale's proceeds to restructure its operations.