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PBGC’s Deficit-Related

Exposure

Each year, PBGC assesses its exposure co losses from unde~4~mdeff

pension plans sponsored by financially weak companies. Its estimates of

exposure are based on companies with credit ratings below investment

grade or that meet one or more of the criteria for financial distress. PBGC

classifies the plans sponsored by these companies as "reasonably

possible" terminations.~2 At the end of fmcal year 2009, PBGC estimated

that its exposure from reasonably possible terminations was

approximately $168 billion, up from $47 billion a yeax earller.~ A

significant part of this increase was due to the dramatic increase in

exposure related to manufacturing, which PBGC attributed primarily to

changes in the auto industry, as well as primary and fabricated metals (see

fig. 6).

~For PBGC to classify a plan as a "reasonably possible" termination, it must have $5 million

or more of underfunding, as well as meet additional criteria, such as that it has fried for

bard~ruptcy, has requested a funding waiver, has missed a minimum funding contribution,

or has a bond rating tt~at is below-investment grade for Standard & Poor’s or Moody’s. At

even higher risk are those companies PBGC classifies as "probables," which are those that

PBGC deems likely to terminate in the future. For more information on this topic, see GAO,

Private Pensions: Questions Concerning the Pension Benefit Guaranty Corporation’s

Practices Regarding Single-Employer Probable Claims, GAO-05-991R (Washington, D.C.~

Sept. 9, 2005).

~PBGC’s exposure to loss ultimately may be less than these amounts because of the limits

on guaranteed benefits, as specified under ERISA and related regulations (see appendix II).

However, calculations taking into account these limits are not specifically factored into

PBGC’s estimates of exposure, per se, because it is difficult to prospectively determine the

precise extent and effect of the limits prior to a plan’s actual termination.

Page 31 GA0-10-492 Troubled 2reset Relief Program

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Figure 6: PBGC’s Estimate of Possible Exposure to Loss by Industry

Manufacturinga

"l~anaportatlon,

eommurdcatlon,

and utilitiesb

Services

Wholesale

and retail

trade

Health

mining, and

construction

Flnallce,

real estate

~ 30.6

2,4

4.5

1,5

0.4

20 40 60 80 100

Dollars In billions

[~FY2008

~FY2009

Source: PBGO 2009 Annual Report.

=For fiscal years 2008 and 2009, manufacturing exposure was pdmadly from automobiles, auto parts,

and primary and fabrteated metals,

~For fiscal years 2008 and 2009, transportation exposure was primarily from airlines,

In May 2009, PBGC reported that unfunded pension liabilities across the

auto industry as a whole totaled about $77 billion as of January 31, 2009,

and accounted for about $42 billion of PBGC’s total exposure of $168

billion.~ This means that, should all the auto industry’s underflmded plans

insured by PBGC be terminated and trusteed, PBGC would be required to

cover about $42 billion of the benefit amounts promised, adding to its

deficit. Between the end of fiscal years 2008 and 2009, the deficit in

UPBGC calculates estimates of exposure by using information such ~ the reports

submitted to IRa and corporate annual reports. Although guaranteed benefit limit

calculations are not part of PBGC’s estimate of its exposure, per ss, its estimate

nevertheless attempts to approximate the losses it would incur under ERISA upon a plan’s

termination. 29 U,S.C. § 1361. Also, PBGC officials noted that these estimates can change

substantially over time due to volatility in discount rates and plan asset Values.

GA0-10-492 Troubled Asset Relief Program

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PBGC’s single-employer insurance program doubled in size from $10.7

billion to $21.1 billion.~ Should all the underfunded auto industry plans

fail, PBGC’s January 2009 estimate indicated that its end of fiscal year 2009

deficit could triple in size. An increase of this magnitude would have

implications not just for PBGC’s accumulated deficit, but for its overall

funding going forward, as the auto industry is responsible for contributing

a significant portion of PBGC’s premiums each year. According to PBGC’s

most recent data book, the motor vehicle equipment industry accounted

for about 1.2 percent of all insured plans under the single-employer

insurance program in 2007, but 6.1 percent of all insured participants and

7.3 percent of all premiums.

With respect to PBGC’s exposure for GM’s and Chrysler’s pension plans in

particular, PBGC calculated its potential exposure prior to when the new

companies assumed sponsorship of the plans. Before the change in

sponsorship, PBGC estimated that its exposure for GM’s unfunded

guaranteed benefits would be about $9.0 billion, and that its exposure for

Chrysler’s unfunded guaranteed benefits would be about $5.5 billion (see

table 4).

Table 4: PBGC’s Estimates of Potential Exposure for GM’s and Chrysler’s Pension Plans in.Early 2009

(Dollars in billions)

Estimated unfunded Estimated unfundsd

Estimated unfunded guaranteed benefit nonguaranteed benefit Estimated number of

benefit liabilities liabilities liabilities participants

GM $27.3 $9.0 $18.3 673,286

Chrysler 10.4 5.5 4.9 249,251

Total $37.7 $14.5 $23.2 922,537

Notes: GM estimates are as of January 31, 2009; Chrysler estimates are as of April 30, 2009rathe

most recent PBGC estimates available, Totals exslude pension plans that.are fully funded, PBGC

officials note that volatility In plan asset returns and valuation discount rates may cause significant

changes in these estimates over time,

~PBGC holds assets in two categories of funds: the trust funds and the revolving funds. The

trtmt Ibnds hold assets acquired from terminated plm~s; the revolving funds consist of

premium receipts. Separate funds are maintained for the single-employer and the

multiemployer programs. 29 U.S.C, § 1305,

J~g~_,~_ _ GAO-10=492 T~o~bled Aaset Relief PrOgram

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Even without the change in sponsorship, actual losses to PBGC could be

substantially different, as estimates of exposure are inherently difficult to

calculate. For example, the significant volatility in plan underhmding and

sponsor creditworthiness over time makes long-term estimates of PBGC’s

expected claims difficult. Moreover, there is a time lag in making these

estimates. Estimates of exposure are generally based on company reports

filed as of December 31 of the previous year. Thus, the dramatic increase

in PBGC’s aggregate reasonably possible exposure between fiscal years

2008 and 2009 depicted in figure 6 was primarily due to the deterioration

of credit qua!iVy and poor asset returns that occurred during calendar year

2008. Subsequent changes in economic conditions (such as the steady rise

in equity retm~s since March 2009) were not yet reflected in these

estimates. In addition, actual losses due to terminated plans depend on

PBGC’s liability only for unfunded guaranteed benefits, but this is not

factored into the estimates because it is difficult to determine the extent

and effect of the limits on guaranteed benefits prior to actual termination.~

However, PBGC’s exposure for unfunded guaranteed benefits in the auto

supply sector has already begun to materialize. Over the past year, the

plans of several large suppliers were terminated and trusteed by PBGC,

and PBGC estimates that the unfunded guaranteed benefits that it will be

required to pay to participants in the plans of these large suppliers will

exceed $6.6 billion (see table 5). The estimate for the pension plans of the

former Delphi Corporation alone is over $6.2 billion.

Table 5: Auto Supplier Pension Plans Terminated and Trusteed by PBGC, May 2009=January 2010

(Dollars in millions)

Estimated unfunded Estimated unfunded

Estimated unfunded guaranteed benefit nonguaranteed benefit Estimated number of

Supplier benefit liabilities liabilities liabilities participants

Delphi Corporation

o Hourly Plan $4,500.0 $3,800.0 $700.0 47,176

. Salaried Plan 2,700.0 2,200.0 500.0 20,203

o Other plans 65.0 60.0 5.0 2,229

~Following termination of a plan insured under the single-employer program, the net

liability assumed by PBGC is equal to the present value of the future guaranteed benefits

payable by PBGC less amounts provided by the plan’s assets and amounts recoverable by

PBGC from the plan spov~or and members of the plan sponsor’s controlled group, as

defined by ERISA, 29 U.S,C. § 1301(a)(14),

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Estimated unfunded I~stlmated unfunded

Estimated unfunded guaranteed benefit nonguaraateed benefit Estimated number of

Supplier benefit liabilities liabilities liabilities participants

Metaldyne Corporation 157.0 153,0 4.0 10,771

HayesoLemmerz 94,4 93.7 0.7 4,786

international

Foamex LP 79.0 76.0 3.0 5,504

Fluid Routing Solutions Inc, 29.7 24.9 4.8 2,400

Prollance International, Inc, 17,0 17,0 0.0 1,620

Contech U.S., LLC 13.6 12,0 1,6 532

Stant Manufacturing, Inc. 9.0 8.9 0,1 900

Total $7,664.7 $6,445.5 $1,219.2 96,121

8our~: GAO analysis o! PBGC estimated data far each plan as of Fabmsq/2010.

To help protect against further exposure, according to PBGC’s 2009 annual

report, the agency was continuing to monitor the auto industry and

negotiate settlements for additional pension protections in several autorelated corporate downsizing cases. For example, in the case of Visteon

Corporation, a large automotive supplier, PBGC negotiated an agreement

in January 2009 that required Visteon to provide over $55 million in

additional protections to workem at closed facilities by making cash

contributions to the plan, a letter of credit to PBGC, and a guaranty by

certain affiliates of certain contingent pension obligations. Similarly, in the

case of Cooper Tire & Rubber Company, PBGC negotiated a deal in August

2009 that required the plan sponsor to strengthen the plan by $62 million,

in connection with a plant closing in Albany, Georgia. According to PBGC,

such protections can help prevent plan termination or, in the event that

the plan does terminate, reduce the losses to the insurance program and

participants.°~

~v29 U.S.C. § 1362(e), which authorizes PBGC to assess plan liability when there is a

substantial cessation of operations by an employer,

~g~: ..... ~ GA0-10~492 Troubled Asset lteliefProgram

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PBGC’s Resource-Related

Exposure

If PBGC were to become trustee of GM’s and Chrysler’s auto plans, the

impact on its resources would be unprecedented. As illustrated in figure 7,

the number of participants and trust fund assets that PBGC is responsible

for managing would .increase dramatically. Moreover, in addition to their

sheer size, these plans have many of the characteristics that contribute to

complexity and delays in processing, such as a history of mergers,

complicated benefit formulas, movement of participants and assets across

plans, and large numbers of participants subject to one or more of the

legal limits on guaranteed benefits.~

Figure 7: 81ze of GM’s and Chrysler’s Plane Compared with Total PBGC-Trustead

Plans

Participantsa Plan assets

Millions Dollars In billions

1.27

1,2

0,9

0,6

0.3

0

1

I

Chrysler

2008 i 2009

Total PBGC Total

participants b GM and

Chryslero

8ouroe: GAO analysis of PBGC and automakem’ d~umen~,

loo

lO4.4

00

60

40

2O

68.’7

64,6

2000 2009

Total PBGC

plan assets d

Total

GM and

Chrysler c

GM

Chrysler

"Participant data for PBGC and the automakers is summed by plan; therefore, employees who

padicipate in more than one plan are counted multiple times.

bPBGC data includes participants in all plans terminated and trusteed under the single-employer

insurance program. (A very’ small number of payees=fewer than 200,=-are from mulliemployer plans

that were terminated and trusteed pdor to October 1980. Since October 1980, PBGC no longer

assumes trusteeship or pays benefits to participants of terminated multlemployer plans.)

~See GAO, Pen,~ion Ben~it G’u, aranty Corporation: More Strategic Alrproaek Needed for

Prooessing Complex Plans Prone to Delays and Overpayments, GAO-09-716 (Washington,

D.C.: Aug. 17, 2009).

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Case 2:09ocv-13616-AJT-DAS Document !38-6 Filed 08/06/10 Page 8 of 30

"Ai~vltlde-a{~efll:tei~be.nefitpla~~ corapan.v’s sponsorship,

GM’s participant data are as of September 80, 2008, and Chrysler’s participant data are as of

January 1,2008 (most recent data available). Data on plan assets reflect measurements in

accordance with Financial Accounting Standards. GM data are as of December 31, 2008; Chrysler

data are as of January 1, 2009.

dPBGC data Includes assets for all plans terminated and trusteed under the single-employer

Insurance program.

Among plans terminated and trusteed by PBGC, the average number of

participants per plan is just under 1,000,~ but most of GM’s and Chrysler’s

plans far exceed this average. For example, as of the end of September

2008, GM’s hourly plan had over 500,000 participants, and its salaried plan

had nearly 200,000o Based on counts as of the beginning of 2008 (the most

recent available), Chrysler’s UAW Plan had about 135,000 participants, and

the Chrysler Pension Plan had about 44,000 participants. Only two of

Chrysler’s ten plans had less than 1,000 participants. Taken together, the

number of participants in these two companies’ pension plans is equal to

about 40 percent of all the participants in all the plans terminated and

trusteed by PBGC since the agency was established in 1974. Even more

striking, taken together, the amount of assets in these two companies’

pension plans exceeds--by a considerable margin--the total amount of

assets that PBGC is currently managing for all the plans it has trusteed

combined (see fig. 6).

In addition to their large size~ GM’s and Chrysler’s plans have many of the

chm~cteristics that, as delineated in a previous report,7° contribute to

complexity and delay in processing. For example, both GM and Chrysler

have long histories of acquisitions, mergers, and divestitures, stretching

over the past century (see appendix V). To determine the potential impact

on any current o1" future retirees or beneficiaries of the plan,

documentation concerning each change must be obtained, along with data

about any affected employees. An employee’s movement from one plan to

another also can cause complexity in benefit calculations. Even within a

plan, tiers can be created that treat some employees differently and make

benefit calculations more complicated. For example, at both GM and

Chrysler, different formulas were created for employees based on such

things as the date employees began participating in their plans or whether

or not they contributed to their plans.

~GAO-09-716.

’~GA0-09-716,

Page 37 GAO-10~492 Troubled Auuet Relief Program

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Delays also result when ~us~ par~icipau~s’ ben~fil~:o~mmpiy

with legal requirements. PBGC guarantees pa~icipants’ benefits only up to

certain limits, specified under ERISA and related regulations.~ Among

GM’s and Chrysler’s plans, certain provisions and characteristics of

participants suggest that many would likely be subject to one or more of

these limits should the plans be terminated, as discussed further in the

next section. Recent changes in the law added new provisions concerning

the treatment of certain events, such as plant shutdowns and at~m’tion

programs (referred to as "unpredictable contingent events’).7~ PBGC has

begun to grapple with some of these complexities following the

termination of the Delphi plans, as many of the benefits provided by the

Delphi plans reflect negotiations with UAW and are similar to benefits

provided by UAW plans across the auto sector.

In its 2009 annual report, PBGC noted that it has been taking steps to

prepare for the possible trusteeship of large auto industry plans by

defining the changes to its infrastructure that would be needed to handle

the increase in workload. The types of changes examined as part of this

effort included expanded contracts, additional staff, and increased

capacity in its information technology system.

High Earners and Early

Retirees Are Most At Risk

for Reduced Benefits

When ERISA’s guarantees do not cover all pension benefits promised by

an underfuuded plan that is terminated, those participants whose benefits

are reduced share in the losses from the plan’s termination. In many cases

involving terminated and trusteed plans, participants’ full benefit amounts

are guaranteed and their benefits are not reduced as a result of the

termination. But in cases involving complex plans with generous benefit

structures such as GM’s and Chrysler’s, large numbers of participantsare

likely to have benefits subject to the guarantee limits and, depending on

the extent of plan underfunding at termination, these participants would

be at risk of having their benefits reduced as a result. When PBGC

calculated its exposure across the auto sector as a whole in January

2009--prior to the shift [u sponsorship of GM’s and Chrysler’s plans to the

"29 U.S.C. § 1322(b)(1), (8) and (7), and 29 C.F.R. §§ 4022.21, 4022.24 and 4022.25 (2009).

These guarantee limits are commonly referred to as the maximum limit, the ~accrued-atnormal" limit, and the phase-in llrult. For further details, see appendix II.

~PPA amended ERISA to provide a special phase-in rule for shutdown benefits and other

unpredictable contingent event benefits. 29 U.S.C. § 1822Co)(8). PBGC intends to issue a

separate rule to implement this section of the law, but the proposed rule has not yet been

published.

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new companies--PBGC estimated~5 biiiion in~

liabilities would be nonguaranteed benefits; that is, plan participants

would bear losses for about $35 billion in benefits not funded by the

company and not guaranteed by PBGC ff all the at-risk underhmded plans

across the sector were terminated. Of this $35 billion, about half ($18

billion) was attributable to GM’s plans, and another $5 billion was

attributable to Chrysler’s plans.

Participants most often affected by the application of guaranteed benefit

limits are high earners whose benefits exceed the maximum limit,v~ those

who take early retirement, and those whose benefits increased due to

recent plan amendments. We were unable to obtain precise data on the

number of GM and Chrysler plan participants whose benefits might be

reduced due to these limits; however, GM and Chrysler pension plans

provide several options for early retirement, with supplemental benefits to

those who retire before age 62 as a bridge to Social Security benefits.

Under one type of guarantee limit (the accrued-at-normal limit),~ any

supplements being provided to retirees as of the date of plan termination,

and any supplements to be provided to future retirees, would not be

guaranteed. According to PBGC officials, a significant number of GM and

Chrysler participants could be vulnerable to having their benefits reduced

due to this limit should the pension plans be terminated. In addition,

retirees whose benefits reflect increases in the 5 years prior to the date of

plan termination could be subject to another type of guarantee limit (the

phase-in limit).7~ For example, if GM’s and Chrysler’s plans had been

terminated in 2009, this limit would have affected the increases in benefits

provided in the 2007 UAW contracts negotiated with both GM and

Chrysler, causing only a part of those increases to be guaranteed.~ The

~In 2009, the maximum monthly guarantee limit for those age 65 with no survivor benefit

was $4,500, or $54,000 annually. Retirees who are under age 65 as of the date of plan

termination could be subject to a maximum limit on their monthly benefit that is

considerably lower. For example, in 2009, the monthly maximum limit for a retiree age 60

was $2,925, and for a retiree age 50, just $1,575.

~4For more details about the accrued-at-normal limit, see appendix II.

’6For more details about the phase-in limit, see appendix

~°In addition, this limit would have eliminated the additional $300 monthly benefit provided

to certain post-65 retirees and surviving spouses in GM’s salaried plan in exchange for

elimination of their company-sponsored retiree health care,

P~g::~e 39 GAO-10-492 Troubled Asset Relief Program

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increases included as benefit enhancements offered as part of recent

attrition programs would be subject to the phase-in limit, as well.77

Although many participants would likely lose some portion of their

nonguaranteed benefits ff the automakers’ plans were terminated, not all

would be at equal risk. This is because when a pension plan is terminated

and trusteed by PBGC, ERISA specifies that the remaining assets of the

plan and any funds recovered for the plan from company assets be

allocated to participant benefits according to a certain priority order (see

appendix VI).~ Due to this allocation process, ff GM and Chrysler plans

were terminated, participants who were retired (or eligible to retire) for at

least 3 years would be most likely to have some or all of their

nonguaranteed benefits paid, while those participants who retired early--

especially those who retired under one of the special attrition programs--

would be most at risk for having their benefits reduced.~

Passage of Time Would

Shift Termination Losses

for PBGC and Plan

Participants

The exposure to loss from plan termination would shift over time, but it is

unclear whether PBGC or plan participants would be better off as a result.

Hypothetically, if plans were to terminate 5 years into the future--in 2014

instead of 2009--overall losses could either increase or decrease, and how

those losses would be shared between PBGC and plan participants would

likely shift as well. For example, plan assets could grow or diminish over

time, depending on investment returns and employer contributions. Plan

liabilities could also grow or diminish over time, depending on interest

rates, ages of participants, and whether benefits are revised in future

years. In addition, more participants could acquire vested benefits over

time, increasing liabilities; while more benefits would have been paid over

time, decreasing liabilities.

How the losses due to unflmded benefits would be shared between PBGC

(for guaranteed benefits) and plan participants (for nonguaranteed

~For a list of recent GM and Chrysler attrition programs, see appendix III.

~29 U.S.C. §§ 1322(c) and 1344.

rafter benefits derived from employee contributions are paid, benefits of those retired (or

eligible to retire) for at least 3 years are given priority status in this allocation process

(priority category 3). In terminations of large complex plans, plan assets typically are

depleted with the payment of benefits in this priority category. (See GAO-09-716, table 4.)

For PBGC’s example benefit calculations that illustrate how termination of the automaker

pension plans might hnpact participant benefits, see appendix VII.

Troubled ~e~ Relief Program

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Case 2:09-cvo13616oAJToDAS Document 138-6 Filed 08/06/10 Page 12 of 30

benefits) could also sh~-Sver Ome. For exampl~ont~dy

amount of guaranteed benefits would increase over time for three main

reasons: (1) more workers would be eligible to retire with more generous

benefits, based on years of service; (2) the maximum limits are updated

each year and thus would increase, and people would grow older, so the

cutbacks due to this limit would grow smaller; and (3) the benefit

reductions due to the phase-in limit would be phased out. This increase in

the monthly amount of guaranteed benefits would tend to shift costs from

participants to PBGC. Meanwhile, over time, more participants will have

been retired (or eligible to retire) for 3 years or more, and thus have

benefits eligible for higher priority status in the asset allocation process.~°

In addition to shifting the distribution of benefits to be paid among

different groups of participants, this could also cause more of the plan’s

remaining assets to be allocated to guaranteed benefits within this priority

category, with less available to cover nonguaranteed benefits, resulting in

a shift in costs from PBGC to plan participants.

Taking all these factors into account, it is unclear whether the passage of time

would increase or decrease the overall cost of unfunded guaranteed benefits

to be paid by PBGC compared with the loss of unfunded nonguaranteed

benefits to be borne by plan participants. Clearly, improvements in the

financial well-being of the companies and their pension plans would serve the

best interests of both PBGC and plan participants.

~For examples of this impact on participant benefits, see appendix VII.

Page 41 GAO~10~492 Troubled 2~ct Relief Program

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Balancing Multiple

Federal Roles May

Create Tensions and

Challenges

As a result of GM’s and Chrysler’s restructuring, the federal-~overnment

has assumed new roles vis-~vis the automakers as part.owner and lender,

in addition to its traditional role as pension regulator.8~ On behalf of the

U.S. taxpayer, Treasury has an interest, as a shareholder, in the financial

well-being of the companies, as well as the viability of their pension

plans.8~ These interests may diverge at times. Although Treasury has

established policies designed to separate these interests, the perception of

a conflict could arise, for example, should choices need to be made

regarding the allocation of funds from the companies to their pension

plans.

Treasury Has Established

Vaxious Structures to

Mitigate Any Risk Related

to Co~_tlicts

Under normal circumstances, transparency and disclosures to the public

related to agency actions can often mitigate risks related to conflicts of

interest. But, in this case, because this involves private companies and

business sensitive information, Treasury is less able to rely on transparency

and disclosure in its dealings with the automakem to mitigate any potential

conflicts of interest. Nevertheless, as we have previously reported, what

Treasury’s goals are for its investment in Chrysler and GM, among other

things, is important information for Congress and the public to have.~

Although Treasury provides public information on TARP activities,

including AIFP, through its legally mandated monthly reports to Congress,

transaction reports, and others, these reports do not provide information on

the indicators Treasury may use in assessing the goals for its auto

investments and the status of the automakers’ pensions. Identifying these

indicators for Congress, and sharing as much of this information as possible,

while still respecting the sensitivity of certain business information, could

help Congress and the public better understand whether the investment in

B~The IRS oversees the tax qualified status of pension plans and the Secretary of the

Treasury serves as one of the three members on PBGG’s board of directors. 26 U.8.C. §

401(a) and 29 U.S.C. § 1302(d). In addition, PBGC provides insurance for most private

defined benefit plans. 29 U.S.C. § 1821.

~Previous reports have discussed the conflicts of interest that could be created by having

the government both regulate and hold an ownership interest in an institution or company.

See GAO, Troubled Asset ~elief Pregram: The U.~. Government Role as Shareholder in

AIG, Citigroup, Chrysler, and General Motars and Preliminary Views on it~ Investment

Management Activities, GAO-10-325T (Washingtoa, D.C.: Dec. 16, 2009); GAO, Troubled

Asset Relief Program: Status of Efforts to Address Transparency and Accountability

Issues, GAO-09-296 (Washington, D.C.: Jan. 30, 2009); and GAO, Troubled Asset Relief

Program: Additiona~ Actions Needed to Better Ensure Accountability, Integrity, and

Transparency, GAO-09-161 (Washington, D.C.~ Dec. 2, 2008).

~GAO-10-151.

=P~ge~--: ..... GAO-1~492 Troubled Asset Relief Program

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the auto companies has been successful and help mitiga~

perceived conflicts of interest.

Recognizing the potential for interested parties to perceive conflicts,

TreasmT has taken several other steps to mitigate its risk. First, to guide

its oversight of the investments going forward and limit its involvement in

the day-to-day operations of the companies, Treasury developed four core

principles: (1) acting as a reluctant shareholder, for example, by not

owning equity stakes in companies any longer than necessary; (2) not

interfering in the day-to-day management decisions; (3) ensuring a strong

board of directors; and (4) exercising limited voting rights. According to

Treasury officials, use of these core principles defines the operating

boundaries of the federal role within its ownership context by limiting the

reach and ability of the government to exert its powerful influence on the

business and operational matters of these companies. Officials noted that

the core principle of not interfering in day-to-day decisions has been

particularly helpful in dealing with political pressures related to business

operations. For example, officials said that Treasury’s auto team received

about 300 congressional letters in 2009 regarding day-to-day management

issues involving GM and Chrysler. Several of these letters asked about

company decisions and strategies, or called on Treasury to exert influence

on the companies’ business decisions. Some letters lobbied either in favor

of or against a certain practice or activity. Other letters have been passed

along on behalf of a particular constituent concern. Treasury officials said

that, because of their core principle, most of the time they can simply

reply to such letters by reiterating their policy of not getting involved with

the companies’ business decisions, and as a result, they have been able to

avoid having to respond to these pressures.

Second, to implement these core principles, Treasury established a

protective barrier between the Treasury officials (beneath the Secretary

level) who make policy-related decisions with respect to investments in

the automakers and the Treasury officials who are responsible for

regulating pensions or overseeing the operations of PBGC. In theory, this

barrier prevents Treasury in its role as owner from interacting with

Treasury in its role ~ pension regulator or overseer of PBGC. Treasury

officials stated that, in the management of its investment in GM and

Chrysler, the Treasury auto team does not communicate with the IRS or

PBGC.

Given the importance of balancing its competing interests as regulator and

part-owner, and mitigating the appearance of conflicts between these

interests, it is essential that Treasury ensure that it has an adequate

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number of staff with the appropriate skills and expertise to carry out its

various tasks. Because of earlier reductions in the number of Treasury

staff working on the AIFP and Treasury’s stated plans to disband the team

focused exclusively on managing Treasury’s stake in the auto industry, we

recently recommended that Treasury ensure it has the expertise needed to

adequately monitor and divest the government’s investments in Chrysler

and GM.~ We believe that ensuring sufficient staffing continues to be

essential, particularly in light of the circumstances discussed here.

Subsequent to our malting this recommendation, Treasury officials said

they hired two additional analysts dedicated solely to monitoring

Treasury’s investments in Chrysler and GM, and planned to hire one more.

Despite These Efforts,

Tensions May Remain

The steps taken to mitigate any risks likely to result should conflicts of

interest axise~-adoption of the core principles and establishment of a

protective barrier--may help, but the tensions irtherent in Treasury’s

multiple roles remain. This can be illustrated by the conflicting pressures

that would likely be brought to bear in two critical and interrelated

contexts: (I) how to respond to a decline in pension funding; and (2) how

to decide when to sell the government’s shares of stock.

Treasury officials told us they expect both GM and Chrysler to return to

profitability. If this is the case, and the companies are able to make the

required contributions to their pension plans as they become due, then

Treasury’s multiple roles are less likely to result in any perceived conflicts.

However, ff the funding of any of GM’s or Chrysler’s defined benefit plans

declines below certain funding levels set out in statute," the company may

request a waiver--that is, request permission from IRS (within Treasury) to

reduce its required contributions to its plans over an extended period.

Despite Treasury’s protective barrier and the autonomy of IRS to grant or

refuse such a waiver request apart from any Lrffluence from other units

within Treasury, some may still perceive a possible tension between

Treasury’s interest in the value of its shareholder investment and Treasury’s

interest, through its oversight of PBGC, in ensuring the viability of the

pension plans.

In addition, Treasury has been clear that it wants to divest its shares as soon

as practicable, but it must weigh a variety of factors when making the

~GAO-10-151,

u26 U,8.C. §§ 412 and 430.

page 44 GA0-10-492 Troubled A~set Relief Program

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decision about when and how ~ should happ-en=ff ~ t

on the basis of their analysis of the companies’ future profitability, they

believe that both GM and Chrysler will be able to attract sufficient investor

interest for Treasury to sell its equity. However, circumstances that may

appear advisable as to the best time to sell from a shareholder perspective--

that is, which would maximize the return on the taxpayer’s investment--

could be at odds with the best interests of plan participants and beneficiaries.

For example, Treasury could decide to sell its equity stake at a time when it

would maximize its return on investment, but when the companies’ pension

plans were still at risk.

Finally, in the event that the companies do not return to profitability in a

reasonable time frame, Treasury officials said that they will consider all

commercial options for disposing of Treasury’s equity, including forcing the

companies into liquidation, which would likely mean that the companies’

pension plans would be terminated and decisions would need to be made

about the allocation of remaining company assets. In such circumstances,

although there is a protective barrier preventing Treasury in its role as

shareholder from interacting with Treasury in its role overseeing the PBGC,

it may be difficult for the agency to make certain decisions without some

perceiving a tension between these two separate roles.

Concluding

Observations

Treasury’s substantial investment and other assistance, as well as loans

from the Canadian government and concessions from nearly every

stakeholder, including the unions, have made it possible for Chrysler and

GM to stabilize and survive years of declining market share and the

deepest recession since the Great Depression. However, because of the

ongoing challenges facingthe auto industry--including the still recovering

economy and weak demand for new vehicles--the ultimate impact that the

assistance will have on the companies’ profitability and long-term viability

remains uncer~in. This, too, is the case for the companies’ pensions. The

companies’ ability to make the large contributions that would be required

based on current projections is mostly dependent on their profitability.

Treasury officials who oversee TARP expect both automakers to return to

profitability. Ultimately, much of the automaker recovery is not only

dependent on how well the automakers turn their companies around but

also how well the overall economy and employment levels improve.

The suppliers’ future is even more complex. GM and Chrysler are expected

to continue to reduce the number of suppliers that they use going forward.

Suppliers have diversified their client base to include many other domestic

and international automakers to minimize the impact of such cuts, but this

Page 45 GA0-11~492 T~oubled A~et Relief Progrmu

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has caused their viability to be more dependent on a global economic

recovery, which has been slow. A,s a result, supplier bankruptcies and

pension plan terminations may continue for the near future.

In light of these conditions, the risks to PBGC and participants in auto sector

pension plans rereain significant. PBGC estimated its exposure for unfunded

guaranteed benefits across the sector to be about $42 bffiion as of January 3[,

2009, and the exposure for plan participants for unfunded nonguaranteed

benefits to be about $35 billion. The federal government and its institutions,

the autoreakem, and the unions have all made a concerted effort to ensure

that GM and Chrysler do not fail. But, should the autoreakers not return to

profitability, interests may no longer be aligned. Treasury officials said that

they will consider all commercial options for d~sposing of Treasury’s equity,

including liquidation; this would likely reea~ terminating the companies’

pension plans, and allocating remaining company ~ssets. In such

circumstances, it would be difficult for Treasury to make any decisions that

would trade off the value of its investment against the expense of the pension

funds, potentially exposing the government either to loss of its TARP

investment or to significant worsening of PBGC’s financial condition. This is

not a choice the government wants to face, but this risk and its attendant

challenges reereain real.

We recently recommended that Treasury should regularly communicate to

Congress about TARP activities, including the financial health of GM and

Chrysler.8~ This would include information on the companies’ pensions as

an Integral part of the corep~ies’ financial health. Treasm~j already

provides some information on its investments in the autoreakers through

its monthly reports to Congress. In response to our previous

recommendations, Treasury said that it intended to develop an approach

for reporting on its investments in the auto industry that strikes an

appropriate balance between transparency and the need to avoid

corepromising the competitive positions of the companies, and that it was

implereenting a communication strategy to provide key congressional

stakeholdem reore current information about its TARP activities. These

reports could provide a vehicle to report publicly available information on

the financial status of the autoreaker~’ pensions. Such disclosure could

help mitigate the potential or perceived tensions that could arise with the

federal government’s reultiple roles with respect to the automakers and,

~GAO-10451,

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when the tithe comes, could shed light on how Treasury’s decision to

divest will impact the companies’ pension plans.

Agency Comments

and Our Evaluation

We obtained written comments on a draft of this report from the

Department of the Treasury (see appendix VIII) and from PBGC (see

appendix IX). Treasury generally agreed with our findings, but reiterated

the importance of striking an appropriate balance in its public reporting

between its goal of transparency and the need to avoid compromising the

competitive positions of the companies or its ability to recover funds for

taxpayers. Treastu~ noted that it already provides "a wealth of

information" about AIFP on its Web site, and also provides periodic

updates to oversight bodies, including GAO. It further noted that it will

provide additional reports on its investments in Chrysler and GM as

circumstances warrant, but that it will not communicate confidential

business information due to the potential to negatively affect the value of

the investments. Treasury concluded that, given its role as a shareholder, it

would be inappropriate for it to report separately on the assets and

liabilities in the automakers’ pension plans to Congress and the public.

We understand the importance of protecting the aut0makers’ proprietary

interests. However, as we pointed out in our report, Treasury’s role is

multifaceted, serving not only as a shareholder and creditor for Chrysler

and GM, but also as a regulator of pensions. As a creditor of these

companies, Treasury should know and disclose the pension commitments,

which represent liabilities for these companies. These liabilities must be

taken into account when evaluating the financial status of these

companies. GM and Chrysler are already required to disclose certain

information about the status of their pensions in publicly available reports.

By including this publicly available information on the status of the

automakers’ pension plans in its reports to Congress, Treasury could

provide a more complete picture of the companies’ financial health and

help mitigate any perceived tensions between the various roles that the

Treasury currently plays as shareholder, creditor, and pension regulator

without compromising the companies’ competitive positions.

Both Treasury and PBGC provided technical comments, which are

incorporated into the report where appropriate. In addition, we received

technical comments on certain segments of the draft report frqm GM,

Chrysler, and Delphi, and have incorporated their comments where

appropriate, as well.

GAO-10~gg T~oubled Aeaet Relief Program

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We are sending copies of this report to other interested congressional

committees and members, the Acting Director of PBGC, the Secretary of

Labor, the Secretary of the Treasury, and other interested parties. In

additioa, the report is available at no charge on the GAO Web site at

htt:p://www,gao.gov.

If you or your staff have any questions concerning this report, please

contact Barbara Bovbjerg at (202) 512-7215 Coovbjergb@gao.gov) or A.

Nicole Clowers at (202) 512-2843 (clowersa@gao.gov), Contact points for

our offices of Congressional Relations and Public Affairs may be found on

the last page of this report. GAO staff who made key contributions to this

report are listed in appendix X.

Gene L. Dodaro

Acting Comptroller General

of the United States

GAOo10-492 Troubled ~et Relief Program

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List of Committees

The Honorable Daniel K. Inouye

Chairman

The Honorable Thad Cochran

Vice Chairman

Committee on Appropriations

United States Senate

The Honorable Christopher J, Dodd

Chairman

The Honorable Richard C. Shelby

Ranking Member

Committee on Banking, Housing,

and Urban Affairs

United States Senate

The Honorable Kent Conrad

Chairman

The Honorable Judd Gregg

Ranking Member

Committee on the Budget

United Sta~es Senate

The Honorable Max Baucus

Chairman

The Honorable Charles E. Grassley

Ranking Member

Committee on Finance

United States Senate

The Honorable David R. Obey

Chairman

The Honorable Jerry Lewis

Ranking Member

Committee on Appropriations

House of Representatives

.... P~g~-4~ GAO-10-492 Troubled A~et Relief Program

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The Honorable John M. Spratt, Jr.

Chairman

The Honorable Paul Ryan

Ranking Member

Committee on the Budget

House of Representatives

The Honorable Barney Frank

Chairman

The Honorable Spencer Bachus

Ranking Member

Committee on Financial Services

House of Representatives

The Honorable Sander M. Levin

Acting Chairman

The Honorable Dave Camp

Ranking Member

Committee on Ways and Means

House of Representatives

~ aKe~0 G_~O-10-492 Troubled ~set Relief Program

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Both as the former Delphi, prior to bankruptcy, an~i now as the "new

Delphi," postbankruptcy, the Delphi Corporation has been a leading global

supplier of mobile electronics and transportation systems, including

powertrain, safety, thermal, controls and security systems,

electrical/electronic architecture, and in-car entertainment technologies.

Delphi evolved as part of General Motors (GM) until it was spun off as a

separate entity in 1999. At the time it filed for Chapter 11 bankruptcy in

2005, the company employed more than 185,000 workers in 38 countries,

making it one of the largest suppliers in the world.

The former Delphi Corporation sponsored six defined benefit plans for its

U.S.-based workers:

the Delphi Hourly-Rate Employees Pension Plan;

the Delphi Retirement Program For Salaried Employees;

the Packard-Hughes interconnect Bargaining Retirement Plan;

the Packard-Hughes Interconnect Non-Bargaining Retirement Plan;

the ASEC Manufacturing Retirement Program; and

the Delphi Mechatronic Systems Retirement Program.

Following Delphi’s spin off from GM in 1999, GM agreed with its unions,

including the International Union, United Automobile, Aerospace and

Agricultural Implement Workers of America (UAW), to offer pension

protections for certain employees in the event that Delphi’s pension plans

would be frozen or terminated. Specifically, under the agreement, GM

agreed with three unions to provide certain former GM employees retired

from Delphi certain pension benefits that would otherwise not be paid by

Delphi or by the Pension Benefit Guaranty Corporation (PBGC) upon plan

termination. Salaried and certain other union-represented employees did

not receive similar contractual commitments from GM with respect to

their pensions or other postemployment benefits, and they are suffering

the full impact of their Delphi plans having been frozen and terminated.

In addition, GM agreed to provide transfer rights for certain Delphi hourly

UAW-represented employees in the United States. Specifically, it provided

these employees with "fiowback" opportunities to transfer to GM as

appropriate job openings became available at GM. GM employees in the U.S.

had similar opportunities to transfer to Delphi. The original flowback

~P~ge~5~L-- ............ = GA0-~0-492 Troubled Ae~et Relief Program

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Appendix I: The Delphi St~ory

agreement provided that, when an employee transferred, the employee

would be eligible for pension benefits which reflected the transferring

employee’s combined years of credited service. The parties did not transfer

pension assets or liabilities in order to accomplish this. Rather, pension

responsibility between Delphi and GM was allocated on a pro-rata basis

based upon the employee’s credited service at each company.

After Delphi and its U.S. subsidiaries filed for banlevaptcy in 2005, there

were extensive efforts involving negotiations between Delphi, GM, and

other stakeholders to keep the pension plans ongoing. On September 30,

2008, the company froze its salaried plan, the ASEC Manufacturing

Retirement Program, the Delphi Mechatronic Systems Retirement Program

and the Packard Hughes Interconnect Non-Bargaining Retirement Plan.

The company also reached agreement with its labor unions allowing it to

freeze the accrual of traditional benefits under its hourly plan, effective as

of November 30, 2008.

Delphi received the consent of its labor unions and approval from the

court to transfer certain assets and liabilities of Delphi’s hourly plan to

GM’s hourly plan. The first transfer involved liabilities of approximately

$2.6 billion and assets of approximately $486 million (about 90 percent of

the estimated $540 million of assets initially scheduled to be transferred).

It was anticipated that the remaining assets would be transferred by March

29, 2009, upon finalizing the related valuations. In exchange for the first

transfer, Delphi’s reorganization plan released GM from all claims that

could be brought by its creditors with respect to, among other things, the

spin off of Delphi, any collective bargaining agreements to which the

former Delphi was a party, and any obligations to former Delphi

employees. .-

Although the first transfer had the effect that no contributions were due

under the hourly plan for the plan year ended September 30, 2008, Delphi

still had a funding deficiency of $56 million for the salaried plan and an

approximate $13 million funding deficiency for its other pension plans for

the plan year ending September 30, 2008. Delphi applied to the Internal

Revenue Service (IRS) for a waiver of the obligation to make the minimum

funding contribution to the salaried plan by June 15, 2009, and requested

permission, instead, to pay the amount due in installments over the

following 5 years. However, Delphi abandoned the waiver request when it

became clear that it could not afford to maintain the salaried plan and that

GM was not going to assume it.

.....Pag~,4t~L----~ ........... GAO-10-492 Troubled .A~aet Eelie£ Pros*ram

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Appendix l~ The Delphi Story

In the second phase of the transfer, De~hi expected to transfer

substantially all of the remaining assets and liabilities of the hourly plan to

GM. In exchange for the second transfer, GM was to receive a $2 billion

administrative claim when Delphi emerged from bankruptcy. In its 2008

annual report, Delphi was cognizant that the second pension transfer to

GM was contingent upon its emergence from Chapter 11 under a modified

plan of reorganization. If these conditions were not satisfied and the

second transfer did not take place, it would likely be .unable to fund its

U.S. pension obligations. Specifically, Delphi stated that

"... due to the impact of the global economic recession, including reduced global

automotive production, capital markets volatility that has adversely affected our

pension asset return expectations, a declining interest rate environment, or other

re~sons, our funding requirements have substantially increased since September

2008. Should we be unable to obtain funding from some other source to resolve these

pension funding obligations, either Delphi or the Pension Benefit Guaranty

Corporation (the "PBGC") may initiate plan terminations."

Delphi’s financial difficulties continued, and when the second transfer of

pension assets and liabilities to GM was not implemented on July 31, 2009,

PBGC terminated all six of Delphi’s U.S. qualified defined benefit plans.

PBGC assumed responsibility for the plans on August 10, 2009. According

to PBGC, this step was necessary because Delphi had stated that it could

not afford to maintain its pension plans and GM, which itself had

reorganized in bankruptcy earlier in the year, had stated that it was unable

to afford the additional financial burden of the Delphi pensions. PBGC

stated that the Delphi pension plans were $7 billion underflmded when

they terminated the plans. PBGC estimates that it will make up about $6

billion of that shortfall using PBGC ftmds. Following PBGC’s takeover of

the plans, on October 6, 2009, in accordance with Delphi’s plan of

reorganization, the former company sold its U.S. and foreign operations to

a new entity, Delphi Automotive LLP, with the exception of four UAW

sites in the United States and its steering business~ which were sold to GM.

PBGC has acknowledged that the calculation of benefits for former Delphi

plan participants will be a difficult, lengthy process due to the plans’

complex benefit structures and the availability of documentation for all

the mergers and acquisitions that have taken place throughout the life of

the plans. On its Web site, PBGC stated that it could take 6 to 9 months

from Delphi’s date of trusteeship before it ad}usted benefits to estimated

PBGC benefit amounts. Moreover, PBGC noted that it could take several

years to fully review the plan and finally determine all benefit amounts.

GA0-10-492 Troubled ~set Relief P~ogram

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Appendix I][: Legal Limits on PBGC

Guaranteed Benefits

To help protect the retirement income of-U.S, workers wi12z-prlvaL~ uvctor

defined benefit plans, PBGC guarantees participant benefits up to certain

limits specified under the Employee Retirement Income Security Act of

1974 (ERISA) and related regulations. These limits include the phase-in

limit, the accrued-at-normal limit, and the maximum lhnit, as illustrated

below in figure 8.

Figure 8: Determining If a Participant’s Guaranteed Benefit Is Subject to Legal Limits

~

amount o_f my benefit guaranteed? ]

inoreased in the will likely reduce your

last 5 years? guaranteed benefit."

No

Did you ]

receive any ~

supplemental I -

The "accrued-at-normal"

limit will likely reduce your

guaranteed benefit.

Is your benefit

amount greater

than the maximum

set by law for your

age at retirement

and type of benefit?

The "111Bximum"

limit will likely

reduce your

guaranteed

benefit,

Your benefit is likely to be fully guaranteed.

.The portion of

a benefit Increase

that is guaranteed

Is reduse~l fof~.

each yearit

was .not !n eflei~t

duringthe last

5 years,

Supplemental’

benefits that

exceed the

retirement benefit

provided at normal

retirement age ere

not guaranteed,

The level of ’

guaranteed benefits

is limited by an

amount set by law,

It Is also lower for

these retiringbefore  ̄

age 65 or those

with a survivor benefit,

Summary of legal provisions

aplan amendment that was rhode within 1 year

of the d~en termination. For benefit

Improvements that became effective rnore than

1 y~ 5 years prior to the plan’s

te~, tsad amount ls the larger ~,

of 20 psment of ~he benefit increase or $20 p~r

mo~th ~ase for each full year the

i~ect, 29 US,G, § 1322(b)(1)

~ § 402.. ~ 2,25 (2009), :.

guaranteed benefit cannot be greater than the

~y benefit provided as a straight-life annuity

(th~~e life of the

retlr~ payments to survivors)

~s normal retirement age.The

podion of any comb~ retirement benefit

and sup~tt that exceeds the normal

retirement age straight-life annuity Is eliminated r/

ca~ the statutory maximum,

~li~ time the plar~

pe~~ at age 65 a~d

with ~~ a single-life

~. maximum is.10wer for.tho~e .

retlrl~th a survivor benefit, 4

29 U,S,C,~ 1322(b)(3); and 29 O.F.R, ..~

S~rce: GAg analysl, of ERISA, PBGG’s Implementing regulstfor~ and related d~urnen~.

"Benefit Increases subject to phase-in limits also Include "unpredictable eontingent event benefits"

(such as shutdown benefits), In addition, in cases involving bankruptcy, the date the bankruptcy

petition was filed is treated as the termination date of the plan.

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Appendix Ill: Recent Attrition Programs at

GM and Chrysler

Table 5: Recent Attrition Prog~’ams at GM

Plan/program

Hourly Plan

2006 Special Attrition

Program

Estimated Impact on pension

Description obligations"

2008 Special Attrition

Program

Special Attrition Program

3.0 (February 2009)

Hourly UAW employees and select Delphi UAW employees were $1.2 billion decrease In obligations

offered the following: (34,400 acceptances)

o Lump-sum payment of $35,000 for normal or early voluntary

retirement (paid from company assets).

, "Mutually satisfactory retirement" for age 60 and 10 years of

service and preretirement leave for select employees,

depending on plant location.

Buyout of $140,000 for employees with 10 or more years of

service and $70,000 for employees with less than 10 years

of service (paid from company assets).

About 74,000 UAW-represented employees and 2,300 other

union-represented employees were offered the following:

 ̄ Lump sum payment for retirement-eligible employees

($45,000 for production and $62,500 for skilled trade) funded

from plan assets. Lump sum payable as an annuity, .If

elected.

 ̄ "Mutually satisfactory retirement" for age 50 and 10 or more

years of service,

o Preretirement leave for employees with 26-29 years of

service.

o Buyout of $140,000 for employees with 10 or more years of

service, and $70,000 for employees with less than 10 years

of service (paid from company assets).

About 57,000 ~’ourly UAW employees were offered the following:

 ̄ $45,000 incentive value offered to production and skilled

employees for normal/voluntary retirement and buyout.

Incentive included $25,000 vehicle voucher plus $20,000

cash.

 ̄ "Mutually satisfactory retirement" for age 55 with 10 or more

years of service, and age 50 with 10 or more years of service

for select closed or closing plants.

All cash payments were funded from company assets.

$0.8 billion Increase In obligations

(18,700 acceptances)

$1.2 billion increase in obligations

(February and June programs

combined)

(7,000 acceptancei~ in February

program)

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Appendix HI: Recent Attrition Pro~mt~ at

GM and Chrysler

Plan/program

Special Attrition Program

3.1 (June 2009)

Salaried Plan

Description

About 50,000 hourly UAW employees were offered the following:

Normal/voluntary retirement Incentive value of $45,000

(production) and $70,000 (skilled). Incentive Included

$25,000 vehicle voucher. .

 ̄ Buyout Incentive value of $70,000 for those with less than 10

years of service; $105,000 for those with 10 to 20 years of

service; and $140,000 for those with 20 or more years of

service. Incentive included $25,000 vehicle voucher.

 ̄ Preretlrement leave offered to employees’ with 28 and 29

years seniority.

 ̄ "Mutually sat{sfactory retirement" for age 50 and 10 or more

years of service.

All cash payments were funded from company assets.

obligations"

(6,000 acceptances in June program)

2008 Saladed Window Voluntary retirement offers were extended to certain U.S. salaried $0.3 billion increase in obligations

Retirement Program employees, as follows: (3,700 acceptances)

 ̄ 6-month cash lump sum payment from the pension plan for

all retirement-eligible employees (age 62 and older) who

elect to retire or for employees under age 55 who will receive

reduced benefits. Lump sum payable as an annuity, If

elected,

 ̄ Enhanced window retirement factors for employees ages 55

to 61 who are eligible but do not elect the lump sum

payment.

2009 Salaried Window Offers were extended to about 5,700 salaried employees for $0.5 billion increase in obligations

Retirement and Involuntary retirements targeted for October 1,2009, as follows: (3,000 acceptances) Severance Program (June , Unreduced pension benefits for participants age 58 and older 2009) as of October 1,2009; participants ages 53-57 would receive

enhanced window retirement benefits.

o Severance program provides monthly base salary payments

up to 6 months (If classified) or 12 months (If executive).

Severance payments to be paid from company assets.

Source: GM doouments,

’Estimated impact Is based on measurements of pension obligations In accordance with Financial

Accounting Standards. The measurements reflect remeasurements performed around the time of the

respective attrition programs and changes in a number of variables that are incorporated into the

remeasurement calculations, such as changes in presenl-value discount rates, All data included In

this column are approximations,

GAO-10~49Z Troubled A~et Relief Program

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Appendt~ IlI: Recent Attrition Progran~ at

GM and Chryaler

Table 7: Recent Attrition Programs at Chrysler

Plan/program Description Estimated Impact’

Incentive Program for o ~ retirement eligibility (that is, 30 or more years of $1,067 million increase in obligations

Retirement (2006-2009) service, or combination of age and years of service = 85), or (10,956 acceptances)°

age 60 with 10 or more years of service, or age 65 with one

or more year of service.

o $50,000 lump sum payment plus $25,000 vehicle pumhase

voucher,b

Special Early Retirement  ̄ Ag-~’~ 10 or more years of service and not otherwise $401 million increase in obligations

(2006-2009) . eligible for IPR." (3,141 acceptances)

, Normal retirement benefit with no age reduction factor

applied (in certain labor markets, nonviable age reduced to

50).

 ̄ No lump sum.

Enhanced Voluntary  ̄ -~"~,000 lump sum payment plus $~,000 vehicle purchase $57’ million decrease In obligations

Termination of Employment voucher (per "Plant Closure Agreements" - $100,000 plus (7,636 acceptances)

(2007-2009) $25,000 vehicle purchase voucher).~

Other miscellaneous $184 million increase In obligations

 ̄ programs (2006°2008) (438 acceptances)

Source: Chlyl~ler docements.

"Estimated Impact I~ based on measurements of pension obligations in accordance with Financial

Accounting Standards, The measurements reflect remeasurements performed around the time of the

respective attrition programs and changes in a number of variables that are incorporated into the

remeasurement calculations, such as changes in present-value discount rates. Data for 2006-2008

are based on actual numbers; data for 2009 are based on projected numbers, across all ten U,S.

qualified defined benefit plans, as appropriate.

bLump sum payments during 2008 paid wilh pension plan assets; paymenls before 2008 and after

2008 paid with company assets.

=Also Includes data for the Separation Incentive Program,

din 2008, the retirement age was 58 instead of 55 for certain saladed nonunion employees,

Page 57 GAO-10~492 Troubled A~et Relief Program

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Appendix Product Lines and Facilities

Being Eliminated

Product line Current status Location of plant shutdowns

Pontiac Vibe Production ceased at the The New United Motor Manufacturing

end of August 2009. Incorporated facility (known as "Hummi")

Jointly operated by GM and Toyota in

Fremont, CA, to close.

Pontiac Production of the last None identified to date,

Pontiac model will cease

by the end of December

2010.

Hummer In February 2010, GM None identified to date.

Chevy Kodiak and None identified to date.

GMC Topkick

Saturn None identified to date.

announced that the sale

of Hummer to Sichuan

Tengzhong Heavy

Industrial Machinery Co.,

Ltd. could not be

completed and there

would be an orderly wind.

down of Hummer

operations. Currently

approximately 850 units

of the H3 model are

being produced for a fleet

customer. H3 production

will cease at the end of

June 2010. All other

Hummer production

ceased at the end of

September 2009.

Production ceased at the

end of July 2009.

Following Penske

Automotive Group’s

decision to terminate

discussions to acquire

Saturn in Septerober

2009, GM announced

that It would be winding

down the Saturn brand

and dealership network.

Production ceased at the

end of December 2009.

Saab Purchased by Spyker

Cars, NV, on February

2,3, 2010,

The previously announced wind down of

Saab operations has ended, Saab and

Spyker will operate under the Spyker

(AMS:SPYKR) umbrella, and Spyker will

assume responsibility for Saab

operations.

Page 1~8 GAO=10=~92 Troubled Aeset ReliefProg~’am

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Appendix IV: Product Lines and Facilities

Being Eliminated

Product line

Manufacturing

plants

Total number of

assembly, powertraln,

and stamping facilities in

the United States to be

reduced from 47 in 2008

to 34 by the end of 2010

and 33 by 2012.

Parts Three parts distribution

centers closed.

Lo~at~wns

Powertrain casttn~ plant in

Massena, NY, closed in May 2009.

Stamping plant In Grand Rapids, MI,

closed in May 2009.

Assembly plant In Wilmington, DE,

closed in July 2009.

Assembly Plant In Pontiac, MI,

closed in September 2009.

Stamping plant in Mansfield, OH,

closed In January 2010,

Powertraln engine plant in Livonla,

MI, to close by July 2010.

Powertrain components plant in

Fredericksburg, VA, to close by

August 2010.

Powertrain plants: Flint North

components plant and Willow Run

Site, MI; and Parma, OH,

components plant to close by

August 2010.

Stamping plant in Indianapolis, IN,

to close by December 2011.

Stamping plant and assembly plant

tn Shreveport, LA, to close by June

2012.

Parts distribution centers in Boston,

MA; Columbus, OH; and .

Jacksonville, FL, closed on

December 31, 2009.

Source: GM documents,

Page 59 GA0-10-492 Troubled A~et RellegProgram

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Appendix IV~ Product Ltae~ and FaciILttics

Being Eliminated

Table 9: Chrysler Product Lines and Facilities Being Eliminated

Produst line

Dodge Magnum

and the Chrysler

Paclfica,

Omssfire, and PT

Cruiser

convertible.

Current status

Announced in November

2007 that these four

models were to be

eliminated from the

product portfolio through

2008. Subsequently

announced that the PT

Cruiser would remain in

production.

Dodge Ram pick- Announced in June 2009  ̄ St. Louis Assembly Plant North in

up truck that production would end Fenton, MO. See also below,

effective July 10, 2009.

Service and parts List of plants scheduled for o St. Louis Assembly Plant South In

operations closing, as of May 2009. Fenton, MO, closed October 2008.

, Assembly plant in Newark, DE,

closed in December 2008.

St. Louis Assembly Plant North in

Fenton, MO, was to close by the

end of September 2009. Production

to be moved to Warren Truck

Assembly plant.

 ̄ Conner Avenue Assembly Plant in

Detroit, Mr, was to close In

December 2009.

 ̄ Stamping plant in Twinsburg, OH,

was to close In Mamh 2010. Existing

volume to be transferred to Warren

Stamping and Sterling Stamping

plants.

o Assembly plant in Sterling Heights,

MI; engine plant In Kenosha, WI;

and axle plant in Detroit, MI, to close

at the end of December 2010.

Location of plant shutdowns

Production at several North American

assembly and powertrain plants to be

cut, which combined with other actions,

was expected to reduce the number of

hourly jobs by 8,500 to 10,000 people

through 2008. See May 2009 updsted

list of plant closings provided below tn

last row of this table.

Sour{e: Ch~yder documenls.

Page 60 GAOo]t0=,~92 Troubled

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Appendix V: History

and Divestitures

of Major Acquisitions

1910s

GM Chrysler

1900s Founded September 16, 1908.

1908; Acquired Oldsmobile and Reliance Motor Truck

Company.

1909: Acquired Cadillac; Oakland Motor Car Company;

Rapid. Motor Vehicle Company (later renamed GMC

Truck); and Champion (later renamed AC 8park Plug

Company).

1918: Acquired McLaughlin Motor Company (later

renamed General Motors of Canada) and United Motor

Corporation,

1919; Acquired Fisher Body; Dayton Wright Company;

Guardian Frigerator (later renamed Frigidaire); and

Saginaw Malleable Iron Company (renamed Saginaw

Products Company).

1920s 1925; Acquired Vauxhall Motors, Ltd., based in Luton, Founded June 6, 1925.

England. 1928: Acquired Dodge.

1929: Acquired Adam Opel Corporation, located In

Riisselsheim, Germany; and Allison Engineering

Company,

1930; Acquired Electro-Motive Engineering Corporation.

1931; Acquired Holden’s Motor Body Builders Limited;

merged with GM’s Australia Proprietary, Limited, to form

Holden’s Limtted, located in Melbourne, Australia.

1933: Acquired a controlling Interest In North American

Aviation; merged with GM’s General Aviation division.

1930S

1940e

1950s 1953:Acquired Euclid, Inc.

1960s

1970a

1968: Sold most of Euclid; renamed remainlng facilities the

TerexDivision.

1973= Merged Allison Engineering with Detroit Diesel,

1957; Acquired Ensamblaje Venezolana, soon renamed

Chrysler de Venezuela S. A.

1959: Acquired Chrysler South Africa Ltd.

1963: Acquired Chrysler Hellas S. A., Greece.

1965= Acquired the outboard engine business of West

Bend Company of Hartford, Wisconsin and the Lone Star

Boat Company of Piano, Texas, forming the Chrysler Boat

Corporation.

1967; Acquired Redisco, Inc., from Amedcan Motors

Corporation and integrated it with Chrysler Cre.dit to form

Chrysler Financial Corporation, Also acquired 77 percent

of Barrelros Diesel S. A. (Spain), and increased interest in

Chrysler do Brasil (Brazil) to 92 percent.

1970: Control of Rootes Group equity reached 73 percent;

the company renamed Chrysler United Kingdom Ltd.

1976; Sold the Airtemp Division to Fedders Corporation.

1978; Sold the Chrysler Europe Division.

Page 61 GA.O-10~gg Troubled ./~set; I~eliel’ ProgroJn

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Appendix V: History of Ma~or Acquisition~

a~td Dlve~titure~

1980s 1981: Sold Terex Division,

1984: Acquired Electronic Data Systems Corporation.

1985: Acquired Hughes Aircraft Company; merged with

Delco Electronics to form a new subsidiary called Hughes

Electronics.

1988: Spin off of Detroit Diesel.

1989: Purchased 50 percent equity in Saab Automobile

AB of Sweden; later pumhaeed the remaining 50 percent

to become sole owner in 2000.

Ct~or

1980: Sold the Marine Division,

1981: Sold the Defense Division to General Dynamics,

1984: Reorganized into a holding company that included

Chrysler Motors, Chrysler Financial, Gulfstream

Aerospace and Chrysler Technologies,

1987: Acquired Amedcan Motors Corporation (and Jeep)

for $800 million.

1990s

2000s

1993: Sold Allison Gas Turbine.

1996; Sold Electronic Data Systems Corporation.

1997". Sold Hughes Aircraft to Raytheon.

1999; Spin off of Delphi; acquired exclusive rights to the

Hummer brand name from AM General Corporation.

2002: Acquired.the bulk of Korean automaker Daewoo

Motor’s automotive assets and created a new company

called GM Daewoo Auto & Technology.

2003= Sold Hughes Electronics.

2005: Sold Electro-Motive Diesel,  ̄

2006: Divested majority ownership in its financing unit,

General Motors Acceptance Corporation (now known as

GMAC),

2007: Sold Allison Transmission.

:2009= Acquired five U.S.obased components plants from

Delphi.

1998: Merged with Dalmler-Benz AG; operated as

"Chrysler Greup~" a business unit of DaimlerChrysler AG.

2007: Just over 80 percent of Chrysler and its related

financial services business sold to Cerberus Capital

Management for $7,4 billion.

2008: Spin off of Chrysler Financial Corporation.

Source: GM’S and Chryele~’s Web sites.

Page GAO-10~92 Trouble~ .~set Relief Program

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Appendix VI: Allocation of Assets to

Participant Benefits

Wh-el~ a pe~ml ~ -C, EP2SA specifies

that the remaining assets of the plan and any funds recovered for the plan

during the bankruptcy proceedings be a!located to participant benefits

according to six priority categories (see table 10).’

Table 10: Pdorl|y Categories for AIIocstlng Partloipant Benefits

Priority category 1 Accrued benefits derived from voluntary employee contributions,

Priodty category 2, Accrued benefits dedved from mandatory employee

contributions,

Priodty category 3 Annuity benefits that have been In pay status for at least 3 years

before the plan’s termination date, or could have been in pay

status for at least 3 years before the plan’s termination date had

the participant chosen to retire at his or her earliest possible

retirement date; however, benefits subject to the phase-In

limitation (that is, benefit increases made within the last 5 years)

are excluded. These benefits can be either guaranteed or

nonguaranteed.

Other guaranteed benefits, and certain nonguaranteed benefits,’

Other vested nonguaranteed benefits that a participant is entitled

to under the plan; however, benefits that result solely due to the

termination of the plan--which are deemed ffoffeitable"--are

excluded,

Priority category 4

Priority category 5

Priority category 6 All other benefits under the plan. This category Includes

nonvested benefits and "grow-in" benefits, which are benefits

that are provided In some situations where the company

continues to operate after the plan Is terminated.

Source; GAO an~ls o~’ PeGS documents,

Note: The distribution of plan assets Is based on typa of benefit, not retirement status, and many

participants have benefits in more than one category.

"Specifically, the nonguaranteed benefits Included In priority category 4 are those that are

nonguaranteed because they are subject to the aggregate benefits limitation for padicipants in more

than one plan that has been terminated with insufficient funds, or because they are subject to special

provisions applicable to substantial owners (that is, those owning more than !0 percent of the

company).

Funds recovered from bankruptcy proceedings are also allocated using

these priority categories, but unlike plan assets, recoveries are required to

be shared between participants’ unfunded nonguaranteed benefits and

’29 U.S.C. §§ 1322(c) and 1344,

Page 63 GAO=10-492 Troubled A~et ltel~ef Program

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Appendix VI: Allocation of A~sets to

Participant Benefit~

are often more advantageous for participants than residual plan ~sets.

PBGC allocates the participants’ portion of the recoveries beginning with

the highest priority category in which there are unfunded nonguaranteed

benefits, and then to each lower priority category, in succession2

~n cases when a plan’s unfunded n0nguaranteed benefits exceed $20 million, the total

amount to be shared depends on the actual amount recovered. In all other cases~ the

amount to be shared is determined by an average of PBGC’s recoveries over a 5-year

period. ERISA section 4022(c).

~f the assets are not sufficient to pay for aU benefits in a category, the assets are

distributed among the participants according to the ratio that the value of each

participant’s benefit in that priority category bears to the tolml value of all benefits in that

category. Within each priority category (except priority category 5), assets are allocated

first to the participant’s "basic-type" benefits (which include benefits that are guaranteed

by PBGC, or that would be guaranteed but for the maximum and phase-in limits), and then

to the participant’s "nonbasic-type" benefits (which include all other benefits). If the plan

assets available for allocation to priority category 5, wt~ich includes benefits subject to the

phase-in limit, are insufficient to pay for all benefits in that category, the assets are

allocated by date of plan amendment~ oldest to newest, until all plan assets available for

allocation have been exhausted.

Page 64 GAO-10-492 Troubled A~set Relief Program

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Case 2:09ocv-13616-AJT-DAS Document 138-7 Filed 08/06/10 Page 6 of 13

Appendix VII:

Calculations

PBGC Example Benefit

of the automaker pension plans might impact participant benefits,

depending on the participant’s situation (see table 11), The calculations

assume that plan assets and recoveries are not sufficient to fund

nonguaranteed benefits beyond a portion of those benefits in priority

category 3 (that is, of those retired or eligible to retire for at least 3 years),

and they focus on those who would lose the most under such situations.

Although an early retiree eligible for priority 3 status would lose the least,

all early retirees under age 62 as of the date of plan termination would lose

a sizeable portion of their benefits until age 62 because their supplements

are not guaranteed. The person who retired early under a special attrition

program or plant shutdown benefit would lose even more, as the enhanced

benefits under the special program would also not be guaranteed, reducing

the person’s lifetime benefit by more than half. Finally, the person not yet

eligible to retire would lose the most. Compared to the benefits promised

under the plan, he would not be able to retire for 5 more years and his

payment would be less than a quarter of the amount promised. Over time,

in general, more employees will be eligible to retire and qualify for priority

3 status, and the amount of retirees’ monthly guaranteed benefits will

increase.

Table 11: Examples of Participants’ Benefit Reductions If an Automaksr Hourly Plan Were Terminated

PBGC benefit If plan Changes to PBGC benefit If plan terminates 5

Plan benefit terminates in 2009’ years later (in 2014)

Example 1: Employee retires early in 2009 Employee retires early In 2014

Age 53 with 33 years of service (eligible for priority category 3) Age 58 with 38 years of service (eligible for

priority category 3)

Benefit until age 62 $3,200 $1,750b Incremental increase in PBGC benefit

Benefit after age 62 1,750 1,750 Incremental increase in PBGC benefit

Example 2: Employee retires early In 2009

Age 50 with 30 years of service (not eligible for priority category 3)

Employee retires early In 2014

Age 55 with 35 years of service (eligible for

priority category 3)

Benefit until age 62 ,3,200 1,500 Incremental increase in PBGC benefit

Benefit after age 62 1,500 1,500 Incremental Increase in PBGC benefit

Example 3: Employee retires early under special attrition program (or plant Employee retires early under special attrition shutdown) In 2009 (0 percent phase-In) program (or plant shutdown) in 2009 (100

Age 55 with 25 years of service (not eligible for priority category 3) percent phase-In)

Age 55 with 25 years of service (eligible for priority category 3)

Benefit unti! age 62 2,600 600 No loss of benefit enhancements due to phase in,

substantial increase in PBGC benefit

Page 65 GAO-10-492 Troubled ~et Relief Program

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Appendix VII: PBGC ~xample Benefit

Calculation8

Plan benefit terminates In 2009’ years later (In 2014)

Benefit after age 62 1,400 600 No loss of benefit enhancements due to phase in,

substantial increase in PBGC benefit

Example 4: Employee not yet retired when plan terminates in 2009 Employee retires early in 2014

Age 49 with 29 years of sen/lee (not eligible for priority category 3) Age 54 with 34 years of service (eligible for

priority category 3)

Benefit until age 62 3,200 700 Eligible to ’retire, benefits not deferred, substantial

(beginning at age 50 with (beginning at age 55) increase in PBGC benefit

30 years of service)

Benefit after age 62 1,600 700 Substantial Increase in PBGC benefit

8ouree: GAO analysis of PBGC documents,

’PBGC example calculations, assuming plan assets and recoveries are not sufficient to pay

nonguaranteed benefits beyond a porllon of pdodty category 8.

"PBGC benefit If pdority category 3 is 70 percent funded, If more than 70 pement funded, part of the

temporary supplement is payable, and could increase up to $2,750 if 100 percent funded.

Page 66 GAO-10-492 Troubled A~set Relief Program

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Appendix Comment~ from the

Department of the T~ea~ury

DEPARTMENT OF THE TREASURY

WASH|NGTON, D,C.

Mamh 26, 2010

Thomas ,f. McCool

Director, Centur for Economics

Applied Research and Methods

U,S, Govwnmant Accountability Office

441 G Street, N.W.

Washington, D.C. 2054g

Dear Mr, McCool:

The T~eaanry D~pafanvnt (Treasury) al~coiatas the opportunity to review tho OAO’s latest

ch~ report on Treesuryr.~ Tffi-ubled-~ss~FgeRefPmgraro O’ARP), tiffed Trouble~’Asset Relief

Program: Automal~ra° Pension Funding and Multiple Federal Rolea Pose Challenges for the

Future (Draft Rb’vurt). Treasury welcomes the recognition by the GAO that Tree, my through

TARP invos~raents Ires helped make "it possible for Chrysler and GM to stabilize and survive

years ofdeclining market share and the d~-’p~t recession sln~ the Great D~pression." There is

important work ahead and the GAO’s Drai~ Report is constructive as Treasury continues to

implement its Automotive Industry Finenoing l~ogram (AIFP).

Although the Draft Report contains no new recommendations, it suggests that Treasury should

not only report publicly on the auto investments but also on the "status of the uutomakera’

pousious," As we have stated pr~Mously, in eddition to providing a wealth of information on the

AIFP on FinanoialStahility.gov and periodic updates to the ovvrsight bodies, Treasury will

provide additional reports regarding the status of its investm~at~ in the automotive companies as

circumstances warrant. Tr~sury recognizes the importance, a~ noted by.the GAO in its various

rq~om, of striking an appropriate balance in its public reporting between our goal of

transparency and the riced to avoid compromising either the competitive positions of these

automotive companies or Treasury’s abilit~ to recover funds for taxpay~,s. R would be

inappropriate for Treasury in our capaoIV as a shareholder to r~porataly r~por~ on the p~usinn

a~sets and linbiliti~ ~md~" the GM and Chryalor p~a~inn plans, and we auggest directing these.

qu~tioas fo GM and Cluysl~r.

Once again, Treasury appreciates the opportunity to review the Draft Rcpo~t. Treasury also

appreciates the GAO’a close ovcraight of TARP as Treasury develop~ and implcmcnta its

policies to stabilize the financial system. We look forward to continuing this coust~uctive

dialogue.

Herbctt M. Allison, Jr. ]/

A~;sistent Seomt~xy for Finanffl’ai Stahility

Page 67 GAOo10~492 T~’oubled Aaset Relief Program

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Appendix: Comments from PBGC

~,.~ IZO0 KStr~t, N.W., Wa.~hlng~:m, D.C.

March 26, 2010

Gene L. Dodaro

Acting Comptroller General of the United States

U.S. Government Accountability Office

Washington, D.C, 20548

Dear Mr. Dodaro:

Thank you for the opportunity to comment on the draft version of your report entitled,

"TroubIed Asset Relief Program: Automaker Pension Funding and Multiple Federal

Roles Pose Challenges for the Future."

We appreciate GAO’s calling attention to the automakers’ defined benefit pension pI~ins,

their funded status, and the risk of loss faced by plan participants and PBGC~s singleemployer insurance program ff these plans are terminated in the future. As the report

correctly points out, improvements in the firmncial condition of the companies and their

pension plans will strengthen retirement security for plan participants and reduce

PBGC’s exposure to loss. The report also serves to highlight the complexity of the

environment in which PBGC operates as it strives to fulfill its mission. PBGC is actively

monitoring the financial health of plan sponsors in the auto industry, as well as related

corporate transactions that may affect defined benefit pension plans.

Under a separate cover, we lmve provided suggested technical corrections and other

changes to further clarify aspects of the report,

GAO has consi~tentiy reported on matters affecting the retirement security of the

American people, and we especially appreciate GAO’s work in highlighting tile

challenges PBGC faces in "Protecting America’s Pensions."

Sinc~el ~y/

V~b~iger

Acting Director

Page 68 GAO-10-492 Troubled Asset Relief Program

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Appendix X: GAO Contacts

Acknowledgments

and Staff,

GAO Contacts B~b~r~~, ~°~°’ ~’ ’ A. Nicole Clowers, (202) 512-2834 or clowersa@gao.gov

Staff

Acknowledgments

In addition to the contacts named above, Kimberley M. Granger and

Raymond Sendejas, Assistant Directors; Charles J. Ford, Jonathan

McMurray, Margie K. Shields, Sarah A.. Farkas, Heather Halliwell, and

Joseph A. Applebaum made significant contributions to this report. James

Bennett, Jessica A. Botsford, Orice Williams Brown, Susannah L.

Compton, Shannon K. Groff, Cheryl M. Harris, Susan J. Irving, Charles A.

Jeszeck, Gene G. Kuehnemau, Christopher D. Morehouse, Michael P.

Morris, Robert Owens, Roger J. Thomas, and Craig H. Winslow also made

important contributions,

Page 69 GAO-10-492 Troubled A~set lteliefProgram

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Case 2:09-cv-13616oAJT-DAS Document !38-7 Filed 08/06/10 Page 11 of 13

Related GAO

Troubled Asset I~e~~m: .q~,~z U.S. Gow~mt-R~ld~

in AIG, Citigroup, Ckrysler, and General.Motors and Preliminary Views

on its Investment Management Activities. GAO-10-325T. Washington,

D.C.: December 16, 2009.

Troubled Asset Relief Program: Continued Stewardskip Needed as

Treasury Develops Strategies for Monitoring and Divesting Financial

Interests in Ckrysler and GM. GAO-10-151. Washington, D.C.: November

2, 2009.

Pension Benefit Guaranty Corporation: Workers and Retirees

Experience Delays and Uncertainty when Underfunded Plans Are

Terminated. GAO-10-181T. Washington, D.C.: October 29, 2009°

Troubled Asset Relief Program: Status of Efforts to Address

Transparency and Accountability Issues. GAO-09-1048T. Washington,

D,C.: September 24, 2009.

Pension Benefit Guaranty Corporation: .More Strategic Approach Needed

for Processing Complex Plans Prone to Delays and Overpayments.

GAO-09-716. Washington, D.C.: August 17, 2009.

Troubled Asset Relief Program: June 2009 Status of Efforts to Address

Transparency and Accountability Issues. GAO-08-658. Washington, D.C.:

June 17, 2009.

Pension Benefit Guaranty Corporation: Financial Challenges Highlight

Need for Improved Governance and Management. GAO-09-702T.

Washington, D.C.: May 20, 2009.

Auto Industry: Summary of Government Efforts and Automakers’

Restructuring to Date. GA0-09-553. Washington, D.C.: April 23, 2009.

Troubled Asset Relief Program: March 2009 Status of Efforts to Address

Transparency and Accountability Issues. GAO-09-504. Washington, D.C.:

March 31, 2009.

Troubled Asset Relief Program: Status of Efforts to Address

Transparency and Accountability Issues. GAO-09-296. Washington, D.C.:

Januaxy 30, 2009.

Auto Industry: A Framework for Considering Federal Financial

Assistance. GAO-09-242T. Washington, D.C.: December 4, 2008.

Page 70 GAO.i0~492 Troubled A~et Relief Program

Case 2:09-cv-13616-AJT-MKM Document 164-3 Filed 12/20/10 Page 40 of 42
Case 2:09-cv-13616-AJT-DAS Document 138-7 Filed 08/06/10 Page !2 of 13

Related GAO Product~

Ensure Integrity, Accountability, and Transparency. GAO-09-161.

Washington, D.C.: December 2, 2008.

Pension Benefit Guaranty Corporation: Improvements Needed to

Address Financial and Management Cha~enges. GAO-08-1162T.

Washington, D.C.: September 24, 2008.

Defined Benefit Pensions: Plan Freezes Affect Millions of Participants

and May Pose Retirement Income ChaUenges. GAO-08-817. Washington,

D.C.: July 21, 2008.

PBGC Assets: Implementation of New Investment Policy Will Need

Stronger Board Oversight. GAO-08-667. Washington, D.C.: July 17, 2008.

Pension Benefit Guaranty Corporation Single-Employer Insurance

Program: Long-Terra Vulnerabilities Warrant "High Risk" Designation.

GAO-03-1050SP. Washington, D.C.: July 23, 2003.

(130956) Page 71 GAO-10~&92 T~oubled A~set Relief Progra~

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