DETROIT, March 1 (UPI) -- A drastic decline in General Motors Corp.'s U.S. pension funds during a year-long period was due, in part, to questionable spending practices, experts say.
Pension Research Council Executive Director Olivia Mitchell said spending on employee buyout programs and benefit increases dropped the company's pension funds from $20 billion in late 2007 to a $12.4 billion deficit a year later, the Detroit Free Press reported Sunday.
"To the extent it is consistent with the law, the question is: Is it really consistent with the promise?" Mitchell said regarding the spending.
"Workers deferred part of their compensation to get a pension later, and to the extent that salary deferral is going to somebody else, it's going to be a big disappointment."
The Pension Benefit Guaranty Corp. has also questioned GM's pension spending and losses, which included a $11.3 billion drop blamed on investment losses.
The federal group charged with insuring retirement plans opposed using pension funds to pay for employee-reduction programs and buyouts, the Free Press reported.
