N🟁N

NEW YORK--([ BUSINESS WIRE ])--Pension plan experts at Towers Watson (NYSE, NASDAQ: TW), a global professional services company, say that the announcement today by General Motors Company (NYSE: GM) is a major indicator of a growing trend among defined benefit plan sponsors to address the ongoing financial risks associated with such plans. GM announced plans to transfer the pension liability for most of their salaried retirees by the end of 2012 through a combination of voluntary lump sum offers and annuity purchases.

"Settlement of legacy liabilities is not confined to frozen plans"

GM intends to offer lump sums to a portion of their salaried retirees while purchasing annuities for other retirees who do not receive a lump sum offer or who choose not to elect a lump sum. With an annuity purchase, all of the liability for covered retirees is transferred to an insurer. These actions will remove the obligations for most salaried retirees from GMas balance sheet.

aThe combination of tactics and scale of planned actions are unprecedented in the U.S. private defined benefit pension market,a commented Matt Herrmann, leader of Towers Watsonas Retirement Risk Management group.

GMas announcement follows Ford Motor Companyas recent decision to offer lump sums to substantially all former employees by the end of 2013. In both cases, the planned actions are designed to transfer pension liabilities for employees who have previously left the organization a" often referred to as alegacy obligations.a

aThe recent announcements by GM and Ford symbolize a major shift in corporate pension perspective as companies seek to reduce their ongoing financial and administrative burden of obligations for former employees,a said Carl Hess, global head of Towers Watson Investment Services. aImproved pricing, coupled with continued market uncertainty and increased desire to focus on core operations, may result in additional companies exploring these types of actions.a

GMas move comes shortly after their February announcement that they will freeze all future benefits for their current salaried workforce. aSettlement of legacy liabilities is not confined to frozen plans,a said Herrmann. aCompanies sponsoring ongoing plans are also exploring these tactics to help manage the size of their plans and facilitate the continued delivery of defined benefit programs.a

aLump sum offers for retirees and annuity purchases of this magnitude are groundbreaking events in the evolution of risk management strategies. As history suggests, major market shifts are often driven by the actions of the largest corporate plan sponsors,a concluded Hess.

About Towers Watson

Towers Watson (NYSE, NASDAQ: TW) is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management. The company offers solutions in the areas of employee benefits, talent management, rewards, and risk and capital management. Towers Watson has 14,000 associates around the world and is located on the web at [ towerswatson.com ].