US - Fitch rating has downgraded General Motors (GM) citing fears over the impact of impending new pension legislation.
Fitch made the downgrade, from BB to B+, primarily due to concerns over further financial support and/or costs that GM may incur in order to ensure that Delphi is able to reach an agreement with the UAW.
However Fitch also cited concerns regarding any new pension legislation that could force a re-calculation of GM's liabilities and/or higher required contributions.
Fitch said in a release it would montitor whether GM needed to make concessions “or higher pension contributions in order to facilitate the sale of a majority interest in General Motors Acceptance Corporation.”
The US government is looking into modifying regulations relating to corporate defined benefit pension plans which could include significantly more onerous payments to the Pension Benefit Guaranty Corporation (PBGC).
Although the proposals have yet to be approved by Congress, they could see payments to the PBGC by plan sponsors take into account an entity's credit quality and credit rating.
The current PBGC rules do not distinguish between entities of varying credit ratings.
Jonathan Stapleton asks whether newly-accredited professional trustees should be a statutory fixture on pension scheme boards.
Savers are being warned by the Insolvency Service to guard their pension pots from investment scammers and negligent trustees as it winds up 24 companies.
Respondents say they should only be required in certain situations as the system is not broken.