The New GM pension fund is underfunded by less than US $55 billion. GM used the pension fund in a different way than it was originally intended. The plan envisioned a steady march of retirees over time. Instead thousands of younger workers in the mid 40´s and 50´s are becoming eligible for retirement benefits now.

According to "www.nytimes.com" and the June 30, 2009 article "Retired From G.M. at 54. Pensionless at 74?":

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How long the fund can sustain this is a mystery. G.M.’s financial reports combine the U.A.W. pension plan with the company’s other big plan, for salaried employees. (It was frozen in 2006 and cannot undergo a sudden increase in benefits.) The U.A.W. plan’s own annual reports, on file with the Labor Department, provide no fresh financial information because they stop at 2006.

At that point, the fund had roughly $67 billion in assets - more than enough to cover the $59 billion in benefits it had promised to pay. The plan was then paying out a little more than $5 billion a year to retirees.

Now the assets are almost sure to be smaller, thanks to the market losses of 2008 and the growing payouts. “My guess is, they can probably go for 20 years before they run out of cash,” Mr. Elliott said. That may sound like a long time, but with so many retirees and spouses still in their 50s, the plan needs resources for at least 50 years.
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General Motors is using its huge pension fund in a way it never intended. It had planned - and put money aside - for a steady march of retirees over time. But instead, tens of thousands of blue-collar workers, most in their 40s and 50s, are all becoming eligible for retirement benefits now, as the company rapidly downsizes.

And even as its pension fund faces this giant bulge in payouts, G.M. is not putting any new money in — the company is not required to make any contributions to the fund until 2013.

The longer this goes on, the weaker the fund will be and the more uncertain its long-term viability.
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Source(s):
http://www.nytimes.com/2009/07/01/business/01pension.html?pagewanted=1&...

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