2016 UAW-GM Joint Benefit Plans Conference

2016 UAW-GM Joint Benefit Plans Conference
xxxx.pptx – cmuj/opeiu459aflcio

Zach Adams Debbie Pollack Lauren Sokolowski Susan Doherty
UAW International Union Lauren Sokolowski Sr. Client Services Manager, Fidelity Investments Susan Doherty Sr. HR Specialist, Pension, Savings and Profit Sharing Plans, General Motors Tricia Colbeck Administrator, Savings Plans, General Motors Hello. Welcome to the Personal Savings Plan workshop. My name is Terriea Martin from the UAW International Union Staff. I am very happy to be here and I would also like to introduce our presenters, Susan Martz, Susan Doherty and Diane Nagy, from GM Savings Plans and Lauren Sokolowski from Fidelity Investments. Ron Rao, another member of the Savings Plans staff is back in Detroit holding down the office. We will be sharing general information regarding the PSP and hopefully you’ll learn something new that you can use to help our members. Next, Lauren will review educational opportunities. We’ll conclude our session with an educational workshop conducted by Anita Brooks-Locey from Fidelity Investments, as an example of the workshops that will be offered in the OnTarget Financial Education Series. You’ll want to stay until the very end because after Anita’s presentation, we’ll be handing out some prizes which I’ll explain momentarily. Let’s first look at the agenda.

Agenda Introductions Binder Contents PSP Presentation
GM Contributions & Employee Contributions Withdrawal Options as an Active Employee Distribution Options upon Separation or Death Administration and Statistics Average Deferral Awards PSP Wrap-up & Assessment NetBenefits Planning & Guidance Center Demo Profit Sharing (add negotiations changes/highlights) Here are the topics we’ll be reviewing today. As you’ll see, we’ve tried to narrow down the topics to those we know cause you to get questions. We’ll leave some time at the end for questions, and of course we are happy to take any other questions throughout our time here.

Binder Contents Test Your PSP Knowledge
Expanded Roth In-Plan Conversion Flyer EasyEnroll Flyer Impact of Saving 1% More Flyer NetBenefits Planning & Guidance Center Flyer 529 College Savings Brochure List of 529 Plans by State First I’d like to explain the resource information that we’ve placed in your binders which can be found immediately after the presentation blue slides starting on page 27. The first item in your binder contents, is the Test your PSP Knowledge document. We have provided you with another copy of the quiz which you should locate and keep in front of you. We’re going to collect these quizzes before the NetBenefits Planning & Guidance Demo and then after the demo, we’re going to give some prizes for successful completion of the quiz. You’ll find all the correct answers to the quiz throughout this presentation. Next you’ll see a handout on how to locate the GM contributions in an account. You may find this to be helpful if a member isn’t sure how to navigate their account to see the GM contributions. Next is a handout on how to understand asset-based fees. We’re not going to talk in detail about plan fees during this presentation; however this handout will help you if you need to review both where to find the fees and how to understand what they mean. Next, you’ll see a brightly colored patchwork quilt slide which illustrates the importance of diversification. We’ll reference that a bit later in the presentation. Next is the 529 college savings brochure which is on gmbenefits.com and which we sent to all members at the end of last year. Following that you’ll see a list of 529 plans by state for your convenience. The final item is the material which accompanies Anita’s presentation. There are a few items that did not make it to the binder before they were assembled. As a result, we have placed several items at your seat for you to include in your binder. These items include the list of Savings Plans contacts, and you are certainly welcome to contact us throughout the year if anything needs our attention, the distribution guide, which we will refer to in the presentation and overviews of several helpful tools available in Net Benefits. Next we will now move to the assessment questions.

Personal Savings Plan (PSP)

Why is the PSP so important?
The PSP is one component of overall savings for retirement It is the primary retirement savings vehicle General Motors offers to new hire Employees GM Contributions Employee Contributions The PSP is one component of overall savings for retirement It is the primary retirement savings vehicle General Motors offers to new hire employees includes both GM Contributions and Employee Contributions. With that being said, we know that you understand the importance of the PSP for retirement savings. But sometimes it’s good to be reminded why it’s so important and why we should help encourage your members to participate, especially new hires.

GM Contributions Moving into the presentation, let’s first talk about GM contributions to the PSP

Eligibility for the PSP and GM Contributions
Newly hired Employees must be eligible but do not have to contribute to receive GM contributions Eligibility to participate begins the Monday following 90 days of employment Contributions will begin with the applicable pay period A previously eligible Employee who resumes active employment is eligible to participate immediately This slide describes the eligibility for the PSP and for receiving GM contributions. Here are the key things to keep in mind. New hires must have Seniority and contributions begin the first day of the first pay period next following attainment of seniority. As a reminder, In-Progression employees hired on or after 10/15/07 receive $1 per compensated hour. In addition to that In-Progression employees hired after 10/15/07 receive either a 6.4% or 4% Retirement Contribution based on being hired before or after October 3, 2011, as you can see on the slide.

GM Contributions Eligibility Example
June 2016 WE TH FR SA Monday following 90 days SU MO TU First pay date with contributions for week of June 6th

In-Progression Employees
In-Progression Employees hired on or after October 15, receive a Company Contribution of $1 per compensated hour up to 40 hours per week In-Progression Employees hired after October 15, 2007 receive a 6.4% Retirement Contribution Special provisions apply for temp to new hires

Temp to New Hire Eligibility Example
For example, Jane hired as a Temp on March 1, 2015 and was hired as an In-Progression Employee on March 1, 2016 The Benefit Service Date is January 1, 2016 making her immediately eligible on March 1, 2016 to participate in the PSP If Jane does not use EasyEnroll or elect to contribute, the normal auto- enrollment process (3%) will occur for her own contributions GM contributions will begin immediately For Vesting purposes Jane’s temp time will count towards the 3 year requirement for vesting of GM contributions

Putting it All Together – In-Progression GM Contributions
In-Progression Employees hired after October 15, 2007 $1 Per Hour Company Contribution 6.4% Retirement Contribution Based on 40 straight time compensated hours Fully vested upon completing three years of vesting service GM Contributions are not available for loans or withdrawals until termination or retirement from General Motors If this is a more helpful way to think about it, this slide shows what an In-Progression employee receives from GM based on hire date. It’s important also to know that the contributions are based on 40 straight time compensated hours and they are fully vested upon completing three years of vesting service. Also, these GM contributions are not available for loans and withdrawals until an employee terminates, retires from GM, or turns age 65 assuming they are vested.

Employee Contributions
Next, let’s talk about employee contributions

Employee Contributions
Consideration Pre-Tax Roth After-Tax Tax Treatment of Contributions Not taxed Taxed Tax Treatment of Regular Distributions (age 59½ or later) Contributions and earnings are taxed Contributions and earnings are generally tax-free* Contributions are tax- free and earnings are taxed Advantages / When to Consider Decreases current taxes paid May be considered when lower taxes are expected in retirement May be considered when higher taxes are expected in retirement Distributions are not taxed ─ allows for higher overall retirement savings in the PSP Earnings grow tax- deferred May be considered after pre-tax and Roth are maximized to save more in the PSP Now, let’s compare the different types of contributions you are eligible to make in the plan. When you make Pre-tax contributions to the PSP, you are not taxed on the amounts you contribute to the plan– which lowers your overall tax burden in the current year. However, these contributions, and any investment earnings on these contributions, are taxed as income when you receive a distribution. If you make Roth contributions, they are taxed as income in the current year. The key difference is that Roth contributions can generally be withdrawn tax free – neither the contributions or earnings are taxed upon withdrawal. It is important to note that a Roth 401(k) is NOT the same thing as a Roth IRA. Lastly, After-tax contributions are also taxed as income in the current year, but earnins are taxed as income when you receive a distribution. So here is a quick summary of the advantages and when these might make sense for you. Pre-tax deferrals decreases the current taxes you pay, and may be considered when you expect your taxes to be lower in retirement than they are today Roth deferrals are taxed today, and may be considered when you expect your taxes to be higher in retirement than they are today. Additionally, if you are interested in saving as much as possible for retirement, you may want to consider making Roth deferrals. A contribution made on a Roth basis may actually result in more retirement income than the same contribution made on a pre-tax basis, since the Roth contributions will be withdrawn tax free so long as they remain in the account 5 years, while the pre-tax contributions and any earnings are taxable on withdrawal Finally, After-tax deferrals are taxed today, and the earnings on these contributions are taxed in retirement. Of the three choices, this deferral type is the least tax efficient, and you may only want to considered utilizing them AFTER you have maximized your savings opportunity on a Pre-tax or Roth basis. * Generally tax-free if made after a five-taxable-year period (which begins on the first day of the taxable year in which the first Roth contribution was made)

IRS Contribution Limits
Type Amount Applies to Pre-tax / Roth Contribution Limit $18,000 Employee contributions made on a Pre-tax and/or Roth basis Catch up Contribution Limit $6,000 Additional Employee Pre-tax or Roth contributions for those age 50 by the end of the year Defined Contribution Limit $53,000 All contributions─ Employee (Pre-tax, After-tax and/or Roth) and GM Contributions combined $59,000 All contributions─ Employee (Pre-tax, After-tax and/or Roth, and Catch-up) and GM Contributions combined for those age 50 by the end of the year Highly Compensated Employee $120,000 and up Wages for Non-discrimination Testing. Because the PSP is a qualified 401k plan, the IRS sets limits on what can be contributed to the plan on an annual basis, as well as a limit on how much a person can earn and still contribute to the plan. The first limit to know is the pre-tax/Roth limit, which is also referred to as the elective deferral limit. This might be the limit that most people are familiar with. This limits the amount of pre-tax and Roth contributions that can be made. Of course, since contributing on a pre-tax or Roth basis provides a tax advantage, the IRS limits the amount that one can contribute to $17,500. The next limit, catch-up, is for employees who will be age 50 or over by the end of the year and it gives them an additional $5,500 that can be saved on a pre-tax or Roth basis. It’s helpful to know that even if someone turns 50 by the end of the year, they can begin contributing on a catch-up basis at any time in the year. Next comes the defined contribution limit that the IRS sets for all contributions to the plan in a year, both from the employer and the employee which is $52,000. For employees who are 50 or over, their total limit is $57,500. Employees who are super-savers would need to be aware of that limit. The last figure on the chart, $115,000 per year, is the amount of annual compensation used to define a highly compensated employee for nondiscrimination testing which we will discuss later in this presentation.

Plan Reminders/Improvements
Can save up to 100% of weekly earnings for regular and Catch-Up Contributions Employees are eligible to defer contributions to the PSP from Suggestion Award payouts As a result of 2015 negotiations, Participants can now elect investment options in increments of 1% (previously 10% increments) (added slide – decide if we want to keep these reminders in – were in last benefit conf slide)

Auto-Enrollment New hires will be automatically enrolled in the PSP following 90 days of employment Initial deferral set at 3% which is invested in the target date fund closest to age 65 Can increase, decrease, or opt out entirely Able to elect an “unwind” withdrawal within 90 days from the first contribution In order to help new hires begin saving for retirement as soon as possible, they are automatically enrolled in the PSP following attainment of seniority at a pre-tax contribution rate of 3%. They have the ability to increase or decrease this amount, opt-out or unwind the contribution within 90 days. In accordance with a 2011 Negotiations letter agreement, we conducted a special auto enrollment re-solicitation for anyone eligible but not participating. Those identified in that group were auto-enrolled at a 3% pre-tax contribution rate, with the ability to increase or decrease this amount, opt-out or unwind the contribution within 90 days. Through this campaign, were enrolled 4879 employees who were not contributing to the PSP, and as of , 4108 or 84% of them remain enrolled. We want to thank the UBRs for helping make this campaign a success.

New Voluntary Options In accordance with 2015 Negotiations letter agreement, two options were implemented EasyEnroll allows Participants to enroll in the PSP through a simple streamlined process. Employees may elect 4%, 6% or 8% which is invested in the target date fund closest to age 65 Annual Increase Program (AIP) allows Employees to voluntarily increase their contributions in 1% increments at set dates of their choosing Mention the EasyEnroll Flyer in binder Mention the flyer on impact of saving 1% more

In-Plan Roth Conversions
PSP In-Plan Roth Conversions allow the conversion of After-Tax and some Pre-Tax balances to a Roth balance within the PSP Consideration Pre-Tax Convert to Roth Tax Treatment of Regular Distributions (age 59½ or later) Contributions and earnings are taxed Contributions and earnings are generally tax-free* Advantages / When to Consider May be considered when lower taxes are expected in retirement May be considered when higher taxes are expected in retirement Pay taxes on current balances Now The GM plan also allows you to make in-plan Roth conversions This allows you to convert current balances to a Roth 401(k) balance In order to make this conversion, you would have to pay the taxes on the converted balance now, but then would not be required to pay taxes upon distribution, so long as these assets remain in the account for 5 years This may be something to consider if you expect higher taxes in retirement than today, and you can afford these taxes today In general, only contribution amounts that are eligible for in-service withdrawal can be converted to a Roth 401(k) in the PSP. These include after-tax contributions, or pre-tax contributions if you are at least age 59½ As always, you may wish to consider consulting your tax advisor for more information related to the tax consequences of an in-plan Roth conversion *Generally tax-free if made after a five-taxable-year period (which begins on the first day of the taxable year in which the first Roth contribution was made)

Advantages of Roth In-Plan Conversions
Expanded In-Plan Conversion Allows for eligible vested plan balances to be rolled over to a designated Roth account within your PSP Examples of eligible assets in your PSP Employee contributions Some Employer contributions Assets rolled into Plan Advantages Pay taxes now to accumulate tax-free earnings Reduce future income taxes Decide if we want to keep this slide. Some repeats from previous slide

Statistics By Hire Date Seniority Only
Hired Prior to 10/15/2007 Hired Between 10/15/2007 and 10/3/2011 Hired Between 10/3/2011 and 11/22/2015 Hired On or After 11/22/2015 Average Balance $94,461 $33,071 $9,180 $2,383 Median Balance $42,540 $29,296 $8,021 $1,356 Average Age 53 40 37 32 Average Deferral 8% 5% 4% n/a Participation Rate 82% 86% 77% This could be one of the most important slides of the presentation. We broke it out by hire date to demonstrate the difference between the groups and to allow you to see where you fit in amongst your peers using data as of June 30, 2014 Those hired prior to 10/3/11 are doing well for themselves with participation rates in the 80th percentile. This is dramatically improved from years passed!! Those hired after 10/3/11 have room for improvement. Draw your eyes to the median balances for these members. This means that half of those hired on or after 10/3/11 have a balance less than $4,799! While this is better than last year, this is where we need your help to encourage your membership to save more for their future. It is really important for your members to take advantage of the PSP right away and save as much as possible. Even if someone were to save 1% starting at age 25, and assuming they earn $40,000 per year, this would amount to $33 a month today but could grow to upwards of $200-$330 per month in retirement income. Again, that’s only $33 a month today!

Withdrawal Options as an Active Employee
Next let’s talk about withdrawal options as an active employee.

PSP Loans Participants may have up to 5 loans at any one time
One new loan per calendar year Minimum loan amount is $1,000 Repayment terms Up to 5 years or up to 10 years for home loans Prime rate interest Loan deductions continue through payroll Add in script prime interest rate was recently changed to 3.50% effective Jan 1, Last change to the interest rate was in 2007. First, loans. If you weren’t already aware, participants may take loans from their PSP accounts. This is not something that we would encourage because we want employees to save their money for retirement, but it is available for those who need to use it. You can see the specifics on the slide – up to 5 loans at any one time, but only one new loan per calendar year. The repayment terms are up to 5 years or up to 10 for home loans and the interest rate is the prime rate. Employees repay the loans through payment deductions from their weekly paychecks. The minimum loan amount is $1,000, and company contributions are not eligible for loans. The available funds which can be withdrawn for loans are all assets contributed by you, and certain other eligible sources.

Reminder – Loan Repayments
Loan payments are being automatically deducted from Supplemental Unemployment Benefit payments and Short-term Disability Benefit (S&A) payments This helps avoid loan default Result of a letter agreement from 2011 Negotiations Remains the responsibility of each Employee to ensure loan payments are being made If the loan payment exceeds the amount of the check, separate loan payments must be made (add notes – as a result of 2011 bargaining – loan pymts continue – ppts like this, etc). Try and get stats on loan defaults) As a reminder, loan repayments are automatically deducted from supplemental unemployment benefit payments and disability benefit payments in order to help avoid loan default. This is also the result of 2011 Negotiations. Employees need to remember it is their responsibility to ensure the payments are being made.

Hardship Withdrawals Must demonstrate financial need per IRS guidelines Prevent eviction Unreimbursed medical expenses Post-secondary education Purchase of a primary residence Casualty repairs to a primary residence Payments for funeral or burial expenses Now we’ll move on to hardship withdrawals. One can only take a hardship withdrawal for very specific reasons per IRS guidelines, which you can see on the slide. Now let’s talk about some details on taking hardship withdrawals.

Hardship Withdrawals continued
Limited to six (6) per year Includes only Pre-Tax, After-Tax and Roth Contributions (not earnings) Must first take all available loans, withdrawals, and distributions Suspended from contributing to the PSP for the next six months after taking the withdrawal Taxed as ordinary income and if under age 59½, will be subject to a 10% early withdrawal penalty, if applicable First, they are limited to 6 per year. One can only withdraw pre-tax and Roth contributions, and not even earnings. Also, it is important to know that one can only take a hardship withdrawal after all other methods to access the PSP money have been exhausted such as after-tax withdrawals or loans. A person is suspended for 6 months which means they cannot make contributions. Also, there is a tax penalty of 10% for those under 59 ½. These are taken very seriously with strict regulations because this money is never coming back to the plan and the withdrawals compromise retirement savings. As you can tell, we consider hardship withdrawals to be a last-resort type option for people when they really need it.

Hardship Withdrawals continued
Year # of Hardships Amount Withdrawn 2015 3,586 $11,431,459 2014 3,807 $12,305,119 2013 3,585 $12,857,596 2012 3,214 $12,235,594 2011 2,957 $11,954,174 Of those hardships taken: 53% were to prevent eviction 24% were for unreimbursed medical expenses 11% were for post-secondary education expenses 5% were for the purchase of a primary residence 5% were for casualty repairs to a primary residence 1% were for payments for funeral or burial expenses Update numbers Here are some statistics on hardship withdrawals. You can see most of them were to prevent eviction.

Other Withdrawal Options as an Active Employee
Employees over age 59½ have no withdrawal restrictions on Employee contributions GM Contributions ($1 per hour & 6.4%) cannot be withdrawn until the earlier of termination, retirement, or age 65 For Employees under age 59½ The IRS defines what is available for withdrawal After-Tax and rollover sources are available for withdrawal There may be tax penalties for early withdrawal Finally, for employees age 59 ½ there are no withdrawal restrictions nor any tax penalties on employee contributions, if you could please add that note in your book. As you will recall, employer contributions can not be withdrawn until termination, retirement, or age 65. For employees under age 59 ½ it is very restricted. Any after-tax and rollover sources are available for withdrawal and there may be tax penalties for early withdrawal

Distribution Options upon Separation or Death
Now we’ll move on to distribution options upon separation or death. You can follow along with the distribution guide in your binders

What happens to a PSP account after separation from GM?
As a result of 2015 negotiations, the De Minimis threshold was raised from $1,000 to $5,000 Provided the account balance is at least $5,000 (excluding rollover) the following options are available: Do nothing – keep your account balance in the PSP Roll account balance over to another employer-sponsored plan, IRA, or other retirement account Request a cash distribution payable to Participant consider flowchart of deminimis process I want to first mention that all of these distribution rules apply in the same way to everyone, regardless of the manner in which they left GM or whether or not they have other retirement benefits. As long as someone has at least $1,000 of vested assets in their account, they may remain PSP participants. That means you can continue to use the PSP account as you have as an employee, for example, if eligible, you can take loans. You may also establish recurring payments to yourself. The only thing you can’t do is contribute more money. You also have the option to roll your account to another qualified retirement plan such as another employer’s plan or an IRA. When you process a rollover to a qualified plan, there is no tax penalty and there are no taxes paid by you. The other option is to request a cash distribution payable to yourself. If you do this and you are under age 59 ½ you will generally pay a penalty. Additionally, the distribution would be considered taxable income for that year. If your vested account balance is less than $1,000 you are required to take a full cash distribution.

What happens to a PSP account after separation from GM? (continued)
If the account balance is less than $1,000 (including rollover amounts), a distribution is required. A notice will be sent to the Participant If no action is taken by the Participant to direct the distribution within 30 days, a payment (less required withholdings) will be processed consider flowchart of deminimis process (include 60 days direct rollover to avoid tax) I want to first mention that all of these distribution rules apply in the same way to everyone, regardless of the manner in which they left GM or whether or not they have other retirement benefits. As long as someone has at least $1,000 of vested assets in their account, they may remain PSP participants. That means you can continue to use the PSP account as you have as an employee, for example, if eligible, you can take loans. You may also establish recurring payments to yourself. The only thing you can’t do is contribute more money. You also have the option to roll your account to another qualified retirement plan such as another employer’s plan or an IRA. When you process a rollover to a qualified plan, there is no tax penalty and there are no taxes paid by you. The other option is to request a cash distribution payable to yourself. If you do this and you are under age 59 ½ you will generally pay a penalty. Additionally, the distribution would be considered taxable income for that year. If your vested account balance is less than $1,000 you are required to take a full cash distribution.

What happens to a PSP account after separation from GM? (continued)
If the account balance is greater than $1,000 (including rollover amounts) but less than or equal to $5,000 (excluding rollover amounts) A notice will be sent to the Participant If no action is taken by the Participant to direct the distribution within 30 days, the entire balance will be rolled over to an IRA Review the PSP Distribution Guide for further details on availability and tax implications consider flowchart of deminimis process (include 60 days direct rollover to avoid tax) I want to first mention that all of these distribution rules apply in the same way to everyone, regardless of the manner in which they left GM or whether or not they have other retirement benefits. As long as someone has at least $1,000 of vested assets in their account, they may remain PSP participants. That means you can continue to use the PSP account as you have as an employee, for example, if eligible, you can take loans. You may also establish recurring payments to yourself. The only thing you can’t do is contribute more money. You also have the option to roll your account to another qualified retirement plan such as another employer’s plan or an IRA. When you process a rollover to a qualified plan, there is no tax penalty and there are no taxes paid by you. The other option is to request a cash distribution payable to yourself. If you do this and you are under age 59 ½ you will generally pay a penalty. Additionally, the distribution would be considered taxable income for that year. If your vested account balance is less than $1,000 you are required to take a full cash distribution.

IRS Rule of 55 If separation from GM occurs in the year the Participant turns age 55 or older, there is no early withdrawal penalty for taking a distribution prior to age 59½ However, if separation is prior to the year in which the Participant turns 55, the Participant must wait until age 59½ to avoid the early withdrawal penalty There is a special IRS rule which benefits employees who separate from their current employer in the year they turn 55 or older. In this scenario, separated employees may take a distribution from their account with no early withdrawal penalty. For example, if someone who turns 55 in December, decides to leave GM today, they may immediately begin withdrawals with no penalty. If that same person left GM last year, at age 53 or 54, they may not make withdrawals without penalty until age 59 ½.

What happens to my PSP upon my death?
When the GM Benefits & Services Center is notified of an Employee’s passing, a case manager is assigned to make this difficult process more understandable to the beneficiary If there is a balance in the PSP, the account would be transferred to the beneficiary based on a hierarchy Spouse, even if not listed as primary beneficiary Someone other than a spouse provided spouse has waived his/her rights to the account The beneficiary of Basic Life Insurance Estate Upon death, the bottom line is that your beneficiary is entitled to your vested assets. However, it’s very important that all participants make the necessary arrangements so the account goes where you want it to go. The first two things we look at is whether or not you have a beneficiary form and whether or not you’re married. Assuming the beneficiary form is in good order, it will be honored. The only other reason it would not be honored is if your form names someone other than your current spouse and your spouse has not waived rights – in this case your spouse is still the beneficiary. If you don’t have a beneficiary form, we follow the hierarchy you see in the second bullet.

What happens to my PSP upon my death? (continued)
Designate beneficiary online at gmbenefits.com or by submitting a paper form to the GM Benefits & Services Center Review beneficiary designation annually or especially following a major life event Birth of a child Death of a spouse Divorce Please ensure your own beneficiary forms are up-to-date, especially if you’re not married or you go through any life event such as divorce, new family member, etc. You may update your beneficiaries on without any paperwork required. Now I’ll turn things over to Ron from GM Employee Benefits.

Administration and Statistics
Now we’ll wrap up this section of the presentation with some administrative items and statistics.

Department of Labor Fee Disclosure
Fee Disclosure is mailed annually Includes available plan funds, including the associated asset-based fees and performance information Currently there are no administration fees and the only time an individual fee is assessed is when a Participant requests OVERNIGHT mailing Available online at Fee information is also available on each fund’s Fact Sheet Best resource for understanding asset-based fees is the Quarterly Performance Information Summary Includes the net expense ratio Last year all participants received the annual fee disclosure in August, required by the Department of Labor. This year, it is scheduled to go out in November. It is very similar to the one from last year. This disclosure includes the asset-based fees and performance information for the funds in the PSP. Please remember there are no administrative fees and the only time an individual fee is assessed is when an overnight mailing is requested, for example, for a loan check. This fee is $25. But there’s no fee if you request regular mail or bank account deposit. In your binders you have a handout explaining how to find and understand our asset-based fees. It explains how you can read the fees on each Quarterly Performance Information Summary document. Please refer to the document when reviewing asset-based fees because it includes the net expense ratio, which is the fee participants paid during that quarter. The annual fee disclosure and the Quarterly Performance Information Summary can always be found on ww.gmbenefits.com.

Nondiscrimination Testing
The IRS requires annual nondiscrimination testing of the PSP The test compares the level of contributions between highly compensated (defined as $120,000) and non-highly compensated Employees For 2016 testing, wages are based on 2015 compensation If the Plan fails testing, the Plan will distribute prior contributions to certain highly compensated Employees by mid-March Important note for highly compensated Employees who are high contributors The Plan has been failing the test and we have been distributing excess contributions to these Participants As a result of negotiations, Employees who are eligible for Catch-Up Contributions will have any excess re-characterized as Catch-Up to the allowable limit This process maximizes the amount they are able to contribute (make note of the 115K vs 120K) The IRS requires annual nondiscrimination testing of the PSP. The test compares the level of contributions between highly compensated (defined as $115,000) and non-highly compensated employees. For 2014 testing, wages are based on 2013 compensation. If the Plan fails testing, the Plan will distribute prior contributions to certain highly compensated employees by March 15, Here is an important note for highly compensated employees who are high contributors. The Plan has been failing the test and we have been distributing excess contributions to these participants which maximizes the amount they are able to contribute (add a note to say that we were able to keep money in the participants account due to this re-characterization – help ee’s save)

Annual 5500 Audit A third party independent CPA firm is required to annually audit the Plan Procedures are performed to ensure the Plan is in compliance with federal regulations and Plan Language As a part of the audit, 25 Participants are selected to verify their account information and activity If a Participant is selected and asks about this, please encourage them to respond to the audit request A third party independent CPA firm is required to annually audit the Plan. We use Deloitte. Procedures are performed to ensure the Plan is in compliance with federal regulations and Plan Language. As a part of the audit, 25 participants are selected to verify their account information and activity. If a participant is selected and asks about this, please encourage them to respond to the audit request.

Undeliverable Assets For anyone actively employed who has a check outstanding for one year or greater, the check will be automatically reissued annually For anyone no longer employed who has a check outstanding for one year or greater, the check will be issued upon request or stopped and deposited in the Undeliverable Assets account For outstanding checks that have been deposited to the Undeliverable Assets account, contact the GM Benefits & Services Center to request that the check be researched and reissued as appropriate This process typically occurs in the 4th quarter of each year For anyone actively employed who has a check outstanding for one year or greater, the check will be automatically reissued annually. For anyone no longer employed who has a check outstanding for one year or greater, the check will be issued upon request or stopped and deposited in the Undeliverable Assets account. For outstanding checks that have been deposited to the Undeliverable Assets account, contact the GM Benefits & Services Center to request that the check be researched and reissued as appropriate. This process typically occurs in the 4th quarter of each year.

PSP Statistics Total Plan Market Value $6.4 Billion
Average Weekly Contribution Amount $4.6 Million Total Loans Outstanding and Market Value 52,034 $278 Million Average Account Balance for Active Employees $70,505 Participation 74% (insert new stats) These statistics are as of June 30, You’ll see the total market value is $6.4B. On a weekly basis about $4.6M is contributed. You can see we have a lot of loans outstanding – over 52,000 with a value of over $278M. The average account balance is almost $70K and participation is 74% with those who are eligible for catch-up participating at 5%. If you recall from a prior slide, it is mostly the employees hired prior to 2007 who are driving these statistics.

Average Deferral Rates Awards
At this point we want to thank all the hard work that the UBRs have done in emphasizing participation in the PSP. As we have done in the past, we have broken the facilities down by size. We have a prize for the UBRs from each number one plant. If you are in the audience today, please come up and get your prize. The first category is those with employees with over 2000 employees. And the winner is

Top Average Deferral Rates– Over 2000 Employees
7.19% Lansing Grand River Assembly Local 652 6.98% Spring Hill Assembly Local 1853 6.80% Lansing Delta Township Local 602 Next we have facilities with 1000 – 1999 employees The winner is:

Top Average Deferral Rates – 1000 to 1999 Employees
9.42% Tonawanda Engine Local 774 9.33% Warren Technical Center Local 160 8.33% Lordstown Stamping Local 1714 Next, we will jump ahead to Facilities with less than 200 employees where we had a tie for first place between:

Top Average Deferral Rates – 200 to 999 Employees
11.47% Flint Tool & Die Local 659 10.37% Bay City Local 362 9.33% Flint Engine North Local 599 Bedford CET Local 440 Great Job Grand Rapids Local 167 and Kokomo Local 292 were second and third. Thanks again to everyone for their hard work. I will know turn it over to Lauren.

Top Average Deferral Rates – Less than 200 Employees
10.44% Baltimore Transmission Local 239 9.11% Fort Worth CCA Local 816 8.94% Chicago CCA Local 2114 I saved the next category for last, since this facility has the highest participation rate of all, regardless of size at 89.8% participation;

Wrap-up and Assessment

Assessment What is the Retirement Contribution percentage made by the company to the PSP for all eligible Employees hired after October 15, 2007? 3% 6.2% 6.4% None of the above Today, we are going to ask five assessment questions at both the beginning and the end of this presentation.

Assessment The $1 per hour Company Contribution is available for withdrawals? True or False Read Slide

Assessment New Hires (following 90 days of employment) are automatically enrolled in PSP at what rate? 3% 4% 6% 10% Read Slide

Assessment Employees age 59 1/2 have no withdrawal penalties
True or False Read Slide

Assessment A minimum loan amount is $1000 True or False Read Slide

Questions? Q& A Take Break And collect quizzes.

NetBenefits Planning & Guidance Center
Take Break? And collect quizzes. Now we’ll turn our attention to the On-Target Financial Education Series.

NetBenefits Planning & Guidance Center Demo
Investing involves risk, including risk of loss. IMPORTANT: The projections or other information generated by Fidelity’s Planning & Guidance Center Retirement Analysis, regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Results may vary with each use and over time. Guidance provided by Fidelity through the Planning & Guidance Center is educational in nature, is not individualized, and is not intended to serve as the primary basis for your investment or tax-planning decisions. Fidelity Brokerage Services LLC, Member NYSE, SIPC 900 Salem Street, Smithfield, RI 02917 © 2016 FMR LLC. All rights reserved Do Demo and then draw names for 5 winners for the quizzes???? Turn over to Profit Sharing afterwards.

Profit Sharing

Jeff Dokho Bob Mikulan Kathleen Grace
UAW International Union Kathleen Grace GM Pension, Savings and Profit Sharing Plans

Agenda 2015 Provisions Eligible Profit Sharing Amounts
Profit Sharing Payment Calculations Compensated Hours in Profit Sharing Plan Deferrals to Personal Savings Plan (PSP) Today, we’ll first walk through the Provisions of the Profit Sharing Plan that changed in the 2015 Agreement Next, we’ll walk through the Profit Sharing Payment Calculations and discuss what hours are included and what hours are not included in Compensated Hours under the Plan Then, we’ll conclude with several slides relating to the members’ ability to defer a portion or all of their Profit Sharing payment to their Personal Savings Plan account

New Language – Summary Changes in provisions
If the change impacted multiple language Sections, we’ve grouped them together for understanding Changes that did not change administration of the Profit Sharing Plan Spelling out General Motors Company versus GMC Capitalization of some terms and inclusion of hyphens GM’s 10-K Line references changed descriptively since 2011, so Profit Sharing language was updated to align with those descriptions. The next several slides will call out those changes. “Adjusted earnings before interest and income taxes” replaced with “Income/(loss) before interest and taxes adjusted” No longer require references to 8-K reporting as 10-K contains the GMNA EBIT-Adjusted amount upon which Profit Sharing is based. In working through the 2015 changes in the Profit Sharing language, we won’t walk through the language in pure sequential order. When a change is similarly impacting several sections, we’re grouping them together. Also, for the purpose of saving time in this presentation, we aren’t going to walk through cosmetic changes such as changes to upper case letters and spelling out acronyms if those are the only change made in a section. We will see some of these changes in the following slides because they’re occurring in sections that do have other updated wording. In 2015, we made a number of changes to the language that didn’t impact the Plan administration, but were made to provide clarify or to align with other public document descriptions. READ BULLETS

Wording to Match 10-K Line Descriptions
F, Section 3(b) (b) All computations made by General Motors Company and/or the Company to determine GMNA EBIT- Adjusted and the Eligible Profit Share Amount, when based on General Motors Company’s Income / (loss) before interest and taxes-adjusted that management reports to its shareholders, the investment community and to the Securities and Exchange Commission (“SEC”) as reflected in Article II, Section and Article VI, Section 6.02 of the Plan shall be final and binding on the Union, Employees , authorized Employee representatives, and the Company. As described in General Motors Company’s Annual Report, GMNA is comprised of sales, manufacturing and distribution operations in the U.S., Canada and Mexico and distribution centers in Central America and the Caribbean. In North America, vehicles are currently sold through four brands – Chevrolet, GMC, Buick and Cadillac – which are manufactured at plants across the U.S., Canada and Mexico and imported from other GM regions. If General Motors Company modifies its GMNA segment such that under generally accepted accounting principles a restatement of the Segment Reporting footnote in the audited, annual consolidated financial statements of GMNA EBIT-Adjusted is required, the parties will meet to determine a mutually acceptable solution for determining profit sharing under the Plan on a prospective basis. As covered in the previous slide, the following slides reflect changes to the Plan language so that the language matches the description in the 10-K line item. There are also several spots where General Motors Company replaces GMC in the language.

Art. II, 2.06 – “GMNA EBIT-Adjusted” General Motors North America (GMNA) EBIT- Adjusted means GMNA’s Income (loss) before interest and taxes-adjusted as reported in the Segment Reporting footnote of General Motors Company’s annual consolidated financial statements as included in General Motors Company’s Form 10-K filed with the SEC. General Motors Company’s consolidated financial statements are audited by independent registered public accountants (selection of which shall be made by General Motors Company and must be approved by the shareholders). GMNA EBIT-Adjusted includes adjustments determined by General Motors Company (i.e. exclusion of non-operating results that management does not consider when assessing and measuring the operational and financial performance of the organization). In the event changes in terminology or reporting requirements (e.g. elimination of Sarbanes-Oxley Act), affect the calculation or public disclosure of GMNA EBIT-Adjusted, the affected calculation shall be performed in a manner consistent with the disclosure of financial performance to General Motors Company’s shareholders and/or investment analysts of GMNA’s operational and financial performance. In the event of a future change in the disclosure of GMNA EBIT-Adjusted , the Company is required to inform the Union of the change, and the parties will meet to discuss it. In addition to the language changes to match the 10-K descriptions, you should note the final sentence which describes the Company’s obligation to inform the Union of any change in the disclosure of GMNA EBIT-Adjusted.

Art. IV, 6.02 – “GMNA EBIT-Adjusted” General Motors Company will file a Form 10-K annually with the SEC, which will include General Motors Company’s consolidated, audited financial statements. The audited financial statements will include a Segment Reporting footnote, as required under generally accepted accounting principles, which includes GMNA’s Income/(loss) before interest and taxes-adjusted (“GMNA EBIT-Adjusted”) and such financial statements are included in General Motors Company’s Form 10-K that is filed with the SEC (as defined in Section 2.06). Section 6.02 has only been updated for the description changes required to match the 10-K descriptions.

Letter – Union Reports This will confirm the understanding reached during our recent discussions with the Union regarding the information to be provided to the Union supporting computations made to compute Income/(loss) before taxes-adjusted (the “GMNA EBIT-Adjusted”) in the Proftit Sharing Plan for Hourly-Rate Employees in the United States (the “Profit Sharing Plan”). GMNA EBIT-Adjusted, as reported in the Segment Reporting footnote of General Motors Company’s Form 10-K; A schedule, which details the amount of adjustments attributable to General Motors Company’s GMNA segment to arrive at the GMNA EBIT-Adjusted calculation. GMNA EBIT-Adjusted is the same as the amount reported by General Motors Company in the Segment Reporting footnote of the Form 10-K filed with the Securities and Exchange Commission. The following two slides refer to the Union Reports Letter and the actual Union Reports. Both have been updated to match the 10-K line description changes.

Union Report HOURLY PROFIT SHARING PLAN GMNA EBIT-Adjusted, as Defined in the Plan, for the year ended December 31, 20XX ($ in Millions) GMNA EBIT-Adjusted GMNA’s Income (loss) before Interest and income taxes-adjusted in the Segment Reporting footnote of the Form 10-K $___________

New Language – Dispute Resolution
F, Section 3(d) Any dispute or disagreement arising between the parties with respect to this Agreement or the Plan shall be immediately referred to the Vice President and Director of the UAW General Motors Department and the Company’s Vice President for Labor Relations. The Company and Union recognize it is in the best interest of the parties to work diligently to resolve such disputes or disagreements. If the parties are unable to obtain a mutually agreeable resolution to the dispute or disagreement, then either party may refer the dispute to a mutually acceptable impartial person for resolution upon 30 days notice to either party. The resolution of any such disagreement by such impartial person shall be final and binding upon the Union, Employees and the Company. Except as may be provided for in this Section 3(d), such impartial person shall not, however, have any authority to determine accounting policies or any adjustment made by General Motors Company used in the computation of GMNA EBIT-Adjusted or to the change the dollar amount of GMNA EBIT-Adjusted. The determination of accounting policies (e.g. depreciation, LIFO, expense allocation, etc.), so long as they are within generally accepted accounting principles, remains within the sole discretion of General Motors Company and such determination of accounting policies shall be final and binding upon the Union, Employees and the Company. Jeff and Bob probably want to write the script for these slides

F, Section 3(d) (continued) However, to the extent provided in the Memorandum of Exceptions to Section 3(d) and for the purposes of the Plan only, the impartial person shall have authority to ensure Eligible Profit Share Amounts are calculated with the core principle that Employees deserve to share in the economic gains General Motors Company realizes from its North American operations. Accordingly, the parties intend and an impartial person shall be empowered to act upon, the idea that Eligible Profit Share Amounts should reflect and be linked to the nature of the profitability figures the General Motors Company reports to investors. Under such circumstances, the impartial person may modify the Eligible Profit Share Amount for purposes of payment under the Profit Sharing Plan. The impartial person shall have the authority to resolve any disagreements which may arise out of the last sentence of Section 3(b) of this Supplemental Agreement (e.g. General Motors Company modification of its GMNA segment, etc.). With respect to matters referred to the impartial person, the compensation of the impartial person, which shall be in such amount and on such basis as may be determined by the Company and the Union, shall be shared equally by the Company and the Union.

F, Section 3(d) (continued) Absent the parties’ agreement on an impartial person, and upon 60 days notice by either party, each party shall submit a description of the nature of the disagreement to the Federal Mediation and Conciliation Service (FMCS) who shall provide a list of seven (7) arbitrators, each of whom is a member of the National Academy of Arbitrators and an attorney and/or retired judge experienced in the area of the disagreement and/or in resolving disputes concerning collectively bargained profit sharing plans, enhanced and incentive plans. No later than seven (7) following receipt of the intial panel, either party must party may request a second panel, which will be provided at the cost of the requesting party. Once the panel is settled upon, the parties shall alternatively strike names from the list until one remains. The order of strikes shall be determined by coin flip. The impartial person shall be notified of their selection.

Memorandum of Exceptions to Section 3(d) During these negotiations, with respect to the Plan, the parties discussed circumstances and performance issues that factor into the calculation of GMNA EBIT-Adjusted. In these discussions, the Union and Company reaffirmed the continuing importance of transparency and reliance on the amount of GMNA EBIT-Adjusted as the amount reported to the SEC in a Form 10-K in administering the Plan. The parties also agreed that companies routinely discuss earnings, including EBIT or EBIT-Adjusted performance, with financial analysts and investors, and identify particular events, circumstances, charges, or other factors impacting the reported performance. These discussions by their nature are not efforts to under-report, over-report or mask the actual earnings performance and are typically used to explain the results or show that such events or costs are non-routine or non-recurring.

Memorandum of Exceptions to Section 3(d) (Continued) With respect to rare or infrequent issues with the value of the lower of $1 billion or 20% of GMNA EBIT- Adjusted (but in no case less than $500 million) per incident in a given Plan year, the Company acknowledged that it would continue to timely meet and review such issues with the Union. With respect to such items, the Union asked to meet and address any items regularly referenced in communications to financial analysts and investors, as filed on Form 8-K with the SEC, and where the Company repeatedly interchanges EBIT-Adjusted with such terms as “EBIT-Adjusted Excluding… “ or some other routinely referenced adjustment to EBIT-Adjusted. If such meetings do not satisfy the Union’s concerns regarding the amount used for calculating profits under the Plan, the parties may utilize the dispute resolution procedure set forth in Section (3) of the Agreement. The parties agreed that the meetings covered in this Memorandum are not intended to address special items excluded from GMNA EBIT- Adjusted, other items such as restructuring costs, warranty/recall, strikes at suppliers, impact of foreign exchange, or elements that are routinely included in GMNA EBIT-Adjusted (unless these items otherwise meet the criteria provided in this paragraph).

Memorandum of Exceptions to Section 3(d) (Continued) For purposes of clarification, the impartial person shall not have any authority to determine accounting policies or any adjustment made by General Motors Company used in the computation of GMNA EBIT- Adjusted or to change the dollar amount of GMNA EBIT- Adjusted except as applied to this Plan in conditions provided in this Memorandum.

Domestic subsidiaries included in Plan
Establishment of the Plan General Motors LLC hereby establishes The General Motors Profit Sharing Plan for Hourly- Rate Employees in the United States (hereinafter referred to as the Plan) for itself and certain of its domestic subsidiaries that are approved by the Company Board of Managers for inclusion and as specifically identified in Appendix A to this Plan, with the consent of the union as to their members’ participation in the Plan. The following three slides all relate to domestic subsidiaries whose employees are eligible for participation in the Profit Sharing Plan.

2.10 – “Subsidiary” Subsidiary means a company in which a majority of its voting stock is owned, directly or indirectly , by the Company, as determined in accordance with Internal Revenue Code (“IRC”) Section 414(b), (c) and (m) thereof, in which the Company Board of Managers or its designee for such purpose has approved for inclusion in this Plan and which is specifically identified in Appendix A to this Plan, with the consent of the union as to their members’ participation.

Appendix A Manual Transmissions of Muncie, LLC (formerly New Venture Gear) Muncie, Indiana General Motors Components Holdings, LLC (Grand Rapids, Kokomo, Lockport, Rochester) GMCH has been added to Appendix A. GMCH did participate in the Profit Sharing Plan prior to 2015, so this change is for clarify and hasn’t changed the administration.

Definition of Employee
2.05 – “Employee” Employee means : (a) any hourly-rate person regularly employed on a full-time basis by the Company or a Subsidiary in the United States. (e) The term “Employee” shall not include temporary employees. Two changes were made to the definition of Employee under the Plan. 2.05 (a) language has been simplified, with no change in meaning Next 2.05 (e) was added to clarify what has always been administered, specifically that the term Employee under the Plan does not include temporary employees

Tax Withholding from Payments
4.01 – When Profit Sharing Amounts are Determined and Paid Added clarifying language to specify taxes based on Employee tax forms (a) In determining the amount of any applicable withholding tax, the computation of which takes into account an Employee’s spouse and dependents, the Company shall be entitled to rely on the official form(s) filed with the Company for purposes of income tax withholding. The change to 401(a) provides clarity by stating the Profit Sharing payment will be taxed based on Employees’ tax withholding forms on file with payroll. This is not a change in administration, but again provides clarity that they aren’t being taxed at a flat 20% rate.

Flat Dollar Deferrals to PSP
4.01 – When Profit Sharing Amounts are Determined and Paid (b) In lieu of receiving a payment in cash pursuant to subsection (a) of this Section 4.01, each Employee entitled to a payment for any Plan Year of a Profit Sharing Amount as defined in Article II, Section 2.09, other than an Employee whose employment terminated prior to distribution of such Profit Sharing Amounts, may elect to have the Company contribute to the Employee’s account under the General Motors Personal Savings Plan for Hourly-Rate Employees in the United States (the “PSP”) an amount up to 100% in multiples of 1%, or a specific dollar amount of such distribution, after all legally required deductions, provided such amount is not in excess of the maximum amount permitted under Sections 402(g) and 415 of the IRC.

Payments for Deceased Employees
4.02 – To Whom Profit Sharing Amounts are Paid In addition to Employees who are on the active roll at the end of the Plan Year, the Profit Sharing Amount for the Plan Year, if any, will be paid to otherwise eligible, except as otherwise provided in the collective bargaining agreement, (1) Employees on layoff or leave of absence, including sick leave, at the end of the Plan Year, (2) Employees who retired during the Plan Year and (3) the beneficiary, as designated under Article V, Section 5.01 of the Plan, of such Employee(s) who died during the Plan Year. Second paragraph: Payment of a Profit Sharing Amount will be made only to an Employee. However, if the Employee is deceased at the time of payment, the payment will be made to the beneficiary, as designated under Article V, Section 5.01 of the Plan, of such Employee. Changes were made in Section 4.02 to address the administration of the Profit Sharing payment for a now deceased Employee as well as to add eligibility for a payment in the year and Employee terminates their employment if the Employee meets certain criteria. So, first focusing on Payments for Deceased Employees, the Plan has been updated to make the process as easy as possible for the deceased Employee’s family. So, both the first and second paragraph of 4.02 refer you to Section 5.01 for the order in which the beneficiary is determined.

Payments for Deceased Employees
5.01 – Designation of Beneficiaries in Event of Death In the event of an Employee’s death during a Plan Year, any payments due for such Plan Year will be paid in the normal course to an Employee’s surviving spouse. If such an Employee is unmarried, the Employee shall be deemed to have designated as beneficiary or beneficiaries under this Plan the person or persons who receive the Employee’s life insurance proceeds under the Company’s Life and Disability Benefits Program for Hourly Employees. If there is no designated beneficiary, payment will be to the Employee’s estate. Then in Section 5.01, the Plan addresses how the beneficiary can be determined without having to go to the Estate, unless absolutely necessary. First, if the Employee was married, the Profit Sharing payment will be paid to the surviving spouse, If not married, the payment will be made to the same beneficiary by the Employee under the Life and Disability Benefits Program Finally, if no beneficiary designation is on file, the payment will be made to the Employee’s estate.

Payments for Year of Termination
4.02 – To Whom Profit Sharing Amounts are Paid Employees who terminated employment during the Plan Year for any reason other than (1) death, (2) retirement, (3) attainment of age 65, (4) attainment of age 60 but not 65 with 10 years seniority, (5) attainment of age 55 but not 60 with combined years of age and years seniority totaling 85 or more, (6) 30 years seniority, (7) attainment of age 55 but not age 65 with 10 years seniority, whose employment ceases as a result of a plant closing, (8) total and permanent disability prior to attainment of age 65 with 10 years of seniority or (9) pursuant to any voluntary termination of employment shall not be eligible for a payment for the Plan Year. The amount of any such payment shall be determined in accordance with Sections 2.02 and 2.04 of this Plan respectively. Returning to Section 4.02, you’ll see there’s been quite a bit of change made. Prior to 2015, an Employee was only eligible to receive Profit Sharing in the year they terminate their employment if the Employee either passed away, retired or pursuant to a voluntary termination of employment. With the changes in the Plan, Employees who don’t retire but would otherwise meet the historical definition of retirement, such as 300 & Out, 85 Pts., etc. but are In Progression Employees will be eligible for the final Profit Sharing payment. We cover the exceptions to this in the next slide.

Payments for Year of Termination
F, Section 2(d) – Qualifier to Article IV, Section (d) Notwithstanding Article IV, Section 4.02 of the Plan, Employees who were discharged or released under Paragraphs (64)(b), 64(c), 64(d) or 111(b) of the National Agreement shall not be eligible for a Profit Sharing Amount for the Plan Year. The Shin Plaster to the Plan now includes Section 2(d) which clarifies that even if an Employee has 30 years or 85 pts, that the Employee would not be eligible for Profit Sharing at termination if the Employee was discharged or released under paragraphs 64(b), 64(c), 64(d) or 11(b) of the National Agreement.

Article VII, 7.01 7.01 – Amendment, Modification, Suspension or Termination The Profit Sharing Plan is a part of and subject to the terms of the collective bargaining agreement for hourly-represented Employees, and, subject to the terms of that agreement, the Company reserves the right, by and through its Board of Managers, with the union’s consent, to amend, modify, suspend, or terminate the Plan. The language in 7.01 has been clarified but doesn’t change the administration already existing.

Eligible Profit Sharing Amount
Potential Profit Sharing amounts based on range of reported GMNA EBIT-Adjusted 1,850 compensated hours required to receive maximum payment Prorated Profit Sharing payment for hours less than 1,850 No payment until GMNA EBIT-Adjusted hits $1.25 Billion, then $1,250 minimum payout at 1,850 compensated hours $12,000 maximum payout at 1,850 compensated hours and profits in excess of $12 Billion So, now that we’ve covered what has changed in 2015, we’ll cover some additional specifics related to the calculation of the payment. For those of you who are new in your role, this just reminds us that the Profit Sharing Amounts are based on the GMNA EBIT-Adjusted amount reported in GM’s 10-K. The following slides will show how EBIT-Adjusted ties to the individual maximum payment amount. An Employee will receive the maximum payment if they have 1,850 or more Compensated Hours as defined under the Profit Sharing Plan. Those with less than 1,850 hours will receive a pro-rated payment. GMNA EBIT-Adjusted must hit at least $1.25Billion to trigger any Employee payments and that minimum payment for $1.25B is an Employee payment of $1,250 Finally, the maximum Profit Sharing Payment under the Plan is $12,000

Profit Sharing Calculation - Table
GMNA EBIT Adj. Max $ Billions PS/Emp < 1.25 - 1.50 $1,250 1.75 $1,500 2.00 $1,750 2.25 $2,000 2.50 $2,250 2.75 $2,500 3.00 $2,750 3.25 $3,000 3.50 $3,250 3.75 $3,500 4.00 $3,750 4.25 $4,000 4.50 $4,250 4.75 $4,500 GMNA EBIT Adj. Max $ Billions PS/Emp 4.75 < 5.00 $4,750 5.25 $5,000 5.50 $5,250 5.75 $5,500 6.00 $5,750 6.25 $6,000 6.50 $6,250 6.75 $6,500 7.00 $6,750 7.25 $7,000 7.50 $7,250 7.75 $7,500 8.00 $7,750 8.25 $8,000 8.50 $8,250 GMNA EBIT Adj. Max $ Billions PS/Emp 8.50 < 8.75 $8,500 9.00 $8,750 9.25 $9,000 9.50 $9,250 9.75 $9,500 10.00 $9,750 10.25 $10,000 10.50 $10,250 10.75 $10,500 11.00 $10,750 11.25 $11,000 11.50 $11,250 11.75 $11,500 12.00 $11,750 > $12,000 This table shows how the GMNA EBIT-Adjusted amount translates into the maximum Employee payment amounts.

2015 GMNA EBIT-Adjusted In 2015, the GMNA EBIT Adjusted amount reported in GM’s 10-K was $11,026,000,000.

Profit Sharing Calculation - Table
GMNA EBIT Adj. Max $ Billions PS/Emp < 1.25 - 1.50 $1,250 1.75 $1,500 2.00 $1,750 2.25 $2,000 2.50 $2,250 2.75 $2,500 3.00 $2,750 3.25 $3,000 3.50 $3,250 3.75 $3,500 4.00 $3,750 4.25 $4,000 4.50 $4,250 4.75 $4,500 GMNA EBIT Adj. Max $ Billions PS/Emp 4.75 < 5.00 $4,750 5.25 $5,000 5.50 $5,250 5.75 $5,500 6.00 $5,750 6.25 $6,000 6.50 $6,250 6.75 $6,500 7.00 $6,750 7.25 $7,000 7.50 $7,250 7.75 $7,500 8.00 $7,750 8.25 $8,000 8.50 $8,250 GMNA EBIT Adj. Max $ Billions PS/Emp 8.50 < 8.75 $8,500 9.00 $8,750 9.25 $9,000 9.50 $9,250 9.75 $9,500 10.00 $9,750 10.25 $10,000 10.50 $10,250 10.75 $10,500 11.00 $10,750 11.25 $11,000 11.50 $11,250 11.75 $11,500 12.00 $11,750 > $12,000 Looking at the table, we see that since the $11,026,000,000 falls between $11B and $11.25B, the Maximum Employee Payment to be paid in February 2016 was $11,000.

Profit Sharing Payment Calculation
Profit Sharing amount is calculated by dividing an Employee’s Compensated Hours by 1,850 and multiplying the result by the maximum Profit Sharing Amount payable for the Plan Year 1,850 compensated hours results in maximum payment Employees who didn’t reach 1,850 Compensated Hours in the Plan Year received a prorated Profit Sharing Payment which is calculated by dividing the Employee’s Compensated Hours by 1,850 and then multiplying that times the maximum Profit Sharing Amount. So, again for 2015 that maximum was $11,000.

Profit Sharing Payment Calculation
Here are a few examples of how the payment amount is prorated.

“Compensated Hours” Include
Base and Overtime Hours Vacation and Holiday Hours Bereavement Jury Duty Military Leaves 30 days or less up to 120 hours Long Term – only for Noble Eagle / Enduring Freedom Workers Compensation (If actively employed one complete calendar week of plan year) Paragraph 109 Hours (if for administration of National Agreement) This slide addresses what hours are eligible for inclusion in Compensated Hours under the Plan. Read Them Workers Compensation hours are eligible for complete 40 hour weeks for which the Employee received Workers Comp from the Company, but only if the Employee was actively at work for the Company for at least one complete calendar week in the Plan Year.

Earnings Which are Ineligible under “Compensated Hours”
Supplemental Unemployment, including Short Work Week Sickness & Accident / Extended Disability Military Leaves exceeding 30 days that are not for Noble Eagle / Enduring Freedom Cost of Living Allowance Night Shift and Seven Day Premium Incentive Pay Moving Allowance Since SUB and Short Work Week are paid through the GM payroll system, Employees are sometimes confused when their final pay stub for the year exhibits hours in excess of 1,850 hours but they don’t receive a full Profit Sharing payment. This chart calls out the payments whose related hours are ineligible for inclusion in Compensated Hours.

Deferrals to Personal Savings Plan (PSP)
Eligible Employees have the opportunity to make an annual election to defer a portion of their Profit Sharing to their PSP. Effective with the 2015 Plan, the PSP Deferral may be elected either as a flat dollar amount (new provision) or as a percentage The annual deferral election will be reset to zero after payment Each year Eligible Employees may elect to defer all or a portion of their Profit Sharing payment to their PSP account. As we covered in the 2015 Provision Changes, Employees now have the option to defer either a percentage or a flat dollar amount to their PSP. After the Profit Sharing payments are made and the deferrals made to PSP accounts, all Employee deferral elections are reset to zero.

Ineligible to Defer to Personal Savings Plan
Employees are ineligible to defer any portion of their Profit Sharing for the following reasons: Leave of absence Suspension due to a financial hardship Payroll or benefit overpayments, special court orders for child support arrearages and tax levies Terminated and retired Note: Payments less than $50 cannot be deferred and will be paid in cash Not all Employees are eligible to defer their Profit Sharing to their PSP Account. Read Bullets.

Profit Sharing Deferral to PSP
2015 Plan changes added an option to defer a flat dollar amount or percentage Payments in 2016 reflected some odd amounts, like $3 deferral by Employee who elected 3% the previous year and $100 for one previously electing 100%. While the 2015 Plan change provided Employees with the opportunity to defer a flat dollar amount, we did see a number of elections that let us to believe some individuals may have clicked the wrong box when electing. For example, we found a small number of employees who have previously deferred 3% of their Profit Sharing amount who elected to defer $3 in Similarly, some who elected 100% deferrals in the past elected to defer $100 in 2015. We cannot second guess the Employee’s elections, but we want to bring this to your attention because you’re in the best position to encourage Employees to double check their elections.

Deferrals to Personal Savings Plan (PSP)
Taxes and Other Deductions Profit Sharing payment is paid after all deductions for the following Taxes (federal, state, local, FICA) Union dues Benefits and payroll overpayments Court orders (reference letter as handout) The following two slides will address another administrative item that we’d appreciate your assistance in helping Employees understand the impact of their deferrals. Each year we publish a Bulletin in advance of the profit sharing payment deferral window with some helpful examples so that Employees understand that if they defer 100% of their Profit Sharing, what will be deferred is 100% of the Profit Sharing after deducting legally required and contractually required amounts. This deductions include taxes, union dues, benefit and payroll overpayment amounts and any deductions required as the result of a court order.

Examples of Profit Sharing Deferral to PSP
Employees electing a 100% PSP deferral will only have 100% of their Profit Sharing deferred to their PSP account if their additional weekly earnings (in the same check) cover the cost of any taxes, union dues, payroll or benefit overpayments and obligations under any court orders. First we’ll look at the impact on the deferral election when the Profit Sharing amount is $5,000. In example 1 when an Employee is also receiving 40 hours of straight time pay in the same payroll as the Profit Sharing payment, we see that the Employee is electing 100% and is able to defer the full 100%. This is because the Employee’s gross pay of $1, is covering their tax and union dues obligation. The Federal taxes are based off of the $1, but even though the Profit Sharing payment is being deferred, it is still subject to FICA taxes and union dues. The FICA rate is a combined 7.65% of the $6, and the Union Dues equal 1.44% of just the Profit Sharing Amount. So, after subtracting the Federal and FICA taxes as well as the Union Dues from the $1,318.40, this Employee will take home $ in their pay and will defer their full $5,000. In example 2, the Employee has no other compensation in the payroll other than the $5,000 in Profit Sharing, so there are no federal taxes, but the $5,000 is still taxed 7.65% in FICA and 1.44% in Union Dues so total deductions of $454.5 which has to be deducted from the $5,000, leaving $4, available to defer. So, while the Employee elected to defer 100%, the amount being deferred is actually 90.9%

Examples of Profit Sharing Deferral to PSP
Employees electing a 100% PSP deferral will only have 100% of their Profit Sharing deferred to their PSP account if their additional weekly earnings (in the same check) cover the cost of any taxes, union dues, payroll or benefit overpayments and obligations under any court orders. Examples 3 & 4 are similar to 1 & 2, with the only difference being that the maximum Profit Sharing amount is $11,000. In example 3, the Employee is again receiving 40 hours of straight time pay is electing to defer 100%. However, the taxes being deducted are calculated from the higher $11K amount so they eat up more of the $1, The taxes and union dues equal $1, and so exceeds the gross weekly pay of $1, by $111.96, so what is left to defer is $10, or 99%. In example 4, the Employee has no other compensation in the payroll other than the $11,000 in Profit Sharing, so total deductions equal $998.90, which has to be deducted from the $11,000, leaving $10, available to defer. So, while the Employee elected to defer 100%, the amount being deferred is actually 90.9%

2016 UAW-GM Joint Benefit Plans Conference
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2016 UAW-GM Joint Benefit Plans Conference

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2016 UAW-GM Joint Benefit Plans Conference

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