TSC Ratings provides exclusive stock, ETF and mutual fund ratings and commentary based on award-winning, proprietary tools. Its "safety first" approach to investing aims to reduce risk while seeking solid outperformance on a total return basis.Everything seems to be falling to pieces at General Motors ( GM). In the fourth quarter, the defined benefit pension plan for the carmaker's employees became the latest component of the balance sheet to break down. With the increasing threat of a June 1 bankruptcy filing being pushed by the Obama administration, many pension-plan participants are questioning the safety of their retirement benefits. There are about 700,000 GM pensioners plus spouses and dependents. Ford ( F) and Chrysler aren't as close to the chasm as GM. According to General Motors' 2007 10-K, before the market meltdown in 2008, its pension-funding status was on solid footing compared with other large companies such as Macy's ( M), ConocoPhillips ( COP) and Viacom ( VIA.B). General Motors had a funding surplus of $18.7 billion, which resulted in a so-called funding status of 122%. However, after 2008 losses were assessed, the surplus vanished. The pension plan is now underfunded by $13.6 billion. While the pension status won't be reported again until the end of the year, additional losses are almost a certainty at this point, as the S&P 500 has extended its decline so far in 2009. As for GM's stock itself, it has tumbled more than 90% in the past year. The one positive for the GM plan is the allocation of plan assets. According to the 2008 10-K, GM has only 24% of its assets in equities and 61% in fixed income, helping the carmaker avoid greater losses, though also raising questions about the underlying investment assumptions. A portfolio with only 24% of its assets in equity investments is conservative, yet GM expected a return of a whopping 8.5% on its entire portfolio. This number is irrationally high for a plan with a conservative allocation. Expectations of bigger returns have required GM to contribute less to the plan under the assumption that the difference would be covered by gains on assets.