General Motors Corp. was blocked by State Street Bank & Trust from allowing participants in the automaker’s two 401(k) plans to purchase GM common stock shares because of GM’s financial difficulties, said Julie Gibson, GM spokeswoman.
State Street, administrator and fiduciary for the $11.7 billion salaried employees 401(k) plan and $8.6 billion GM hourly employees 401(k) plan, refused to approve registration by GM of shares for sale to participants, Gibson said.
She said GM approached State Street before registering the shares.
Detroit-based GM sought to register additional shares of its stock for purchase by its 401(k) participants after the company suspended purchases because no more registered shares were available, Gibson said.
“It was their [State Street’s] decision it would not be appropriate to register additional shares,” Gibson said.
GM informed participants of the decision. She didn’t know if any GM employees objected to the State Street action.
The 401(k) participants owned $1.4 billion in GM stock. A breakout of the amount of GM stock held by each of the plans wasn’t available.
Gibson declined to provide data; the asset amounts came from GM filings with the SEC and are as of December 31.
Carolyn Cichon, State Street media representative, said, “State Street acts as the investment manager for the GM company stock fund. In its role as investment manager, State Street is required to follow the ERISA framework and focus exclusively on the best interests of the participants. We continue to evaluate the situation on an ongoing basis.”
(For more, read "UAW Chief: Detroit Three Quiet on Helping Retiree Funds" and "GM Doesn't Foresee Required Pension Contributions.")
Filed by Barry B. Burr of Pensions & Investments, a sister publication of Workforce Management. To comment, e-mail email@example.com.