US - General Motors Corporation has won a crucial court decision in its attempt to regain hundreds of millions of dollars from the US federal government over a pension dispute.
In Washington DC, GM is arguing that the government is obligated to make contributions to an underfunded pension linked to Allison Gas Turbine (AGT) which did government work - a division GM sold more than 10 years ago.
Typically, the government pays salaries and part of the pensions to contractors. When such contractors are closed or sold off -- and have an overfunded pension, the government is entitled to recoup the portion of the pension surplus attributable to the amounts it contributed to the pension fund.
In 1996, GM filed a claim for $253m, and four years later sued the government.
Late last month, the judge ruled that the government should pay the allocable amount of AGT's pension underfunding.
However, the government is expected to appeal. If upheld, the ruling means that ceilings on government spending under contracts would not apply to pension claims.
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