GM Pension

In case anyone has missed it, pensions have become the centrepiece of negotiations on GM's potential bailout.

I understand why the unions have negotiated so hard for better pensions; what I am not sure is why they were so comfortable with the risks in the plan as of a year ago. The plan's deficit apparently exploded from 4.5B to over 7B under the watchful eye of the Investment Committee, GM executives and union representatives.

The lesson from this saga is clear (even if the provincial or federal government participate in teh pension bailout): union representatives must oversee all aspects of compensation for their members. This surely includes monitoring the future viability of those benefits. Time for union officials to read up on pension fund risk.