Alfred Kibe, director of capital planning and pensionsfunding in the treasury Department of General Motors, says he isdriven by the idea of challenge. It certainly had to be challengingfor this Kenyan native, who earned a degree in electricalengineering at the University of Nairobi, to switch specialties andcross the globe to go for an M.B.A. in finance at the University ofPennsylvania's Wharton School of Business. Kibe says General Motorsgave him even more opportunities to challenge himself as thecompany's program of rotating people in and out of positions hadhim managing bank relations, business development, auto finance andmost recently capital planning and pension funding.

It was this latest assignment, Kibe says, that has been hisgreatest challenge. He recently led the negotiations to transfersome $26 billion in GM pension obligations to salaried employeesinto a lump sum and annuitization transaction with PrudentialInsurance. The deal, completed on Nov. 1, is the largest suchpension risk transfer on record and represents a huge reduction inpension liability risk for the world's biggest automaker.

Alfred Kibe of GMWhat was it GM did with the pension risktransfer?
We have a company that has about $130billion in pension obligations, so any movement in interest ratesgenerates enormous risk to our liabilities that can then flowthrough to the company's P&L. The challenge was to reduce thatrisk in a way that works first for the retirees and second for thecompany. We had to leave the retirees in at least as good aposition as before the change. The cost to GM was $2.6 billionon a cash basis, though after factoring in certain administrativesavings, the net cost was $2.1 billion.

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