Chrysler to freeze pension plans for white-collar workers hired pre-2004

Article by Anita Panait, on June 17, 2013

Chrysler Group is planning to put freeze by the end of 2013 its pension plans for around 8,000 white-collar workers in the United States who were employed before 2004. According to Chrysler, the workers will be moved to a plan similar to a 401(k) that is offered to salaried employees hired over the last decade.

The carmaker’s move reflects the trend of adopting defined contribution plans, which provide lower risk compared to traditional pension plans. At the end of 2012, Chrysler's pension plans were underfunded by around $8.9 billion. In 2012, General Motors Co. decided to terminate traditional pension benefits for around 19,000 salaried employees hired before 2001.

According to Chrysler, the decision was partly to meet U.S. tax regulations. Chrysler spokeswoman Shawn Morgan remarked that although the carmaker is in compliance with tax regulations today, they decided to make the change after assessing their pension plans.

The carmaker said that worker benefits earned through the end of 2013 will be retained. The freeze, however, will not affect workers hired after 2004, current retirees or former Chrysler employees. Chrysler is also letting retirement-eligible employees to access the full amount of their pension benefits at age 58, rather than age 62.

The carmaker will provide free financial counseling for workers for six months. New white-collar workers have not received pension benefits since 2004, when the carmaker shifted strategies to head off "unpredictable financial costs," according to Chrysler's senior vice president of human resources, Nancy Rae. [source: Reuters]

Topics: chrysler

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

More positive news has been pouring in before the year ends. For those who have been waiting to hear the latest word on Toyota 86, we have some great news....
by - December 10, 2016
Hyundai is making the green vehicle race more competitive by offering three powertrain types -- pure electric (EV), hybrid (EV plus combustion engine) and plug-in hybrid (PHEV) – in one...
by - December 9, 2016
Although specs for the new Renault Megane had already surfaced several weeks ago, we didn’t know that the company has cooked up something new. Aside from the 200hp gasoline, Renault‘s...
by - December 9, 2016
For the first time in fifty-eight years, Infiniti registers its first US-Spec Q60 Coupe in Cuba. American products have not been allowed entry into Cuba for six decades. But it...
by - December 9, 2016
Chevrolet has already given out the pricing for some of its 2018 Equinox models. Not only will the new Equinox be available in both the US and Canada, it is...
by - December 9, 2016
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries