DETROIT (Nathan Bomey, Detroit Free Press Business Writer) - Chrysler Group plans to freeze its pension plan for its U.S. salaried workers at the end of 2013, following a similar decision made by General Motors a year ago.
The move, which affects 8,000 current workers but does not affect retired workers or hourly employees, comes about a decade after Chrysler stopped offering pensions to new employees.
This decision means that as of Dec. 31, 2013, the 8,000 current Chrysler salaried workers who have earned a pension will no longer accrue additional benefits. They will get to keep the pension benefits they have earned so far.
Starting in 2014, the automaker will transition those employees into a defined contribution plan, which is what the automaker already offers to salaried workers who were hired as of Jan. 1, 2004.
Chrysler issued a statement describing the change as "consistent with industry trends."
The automaker said it would also provide retirement planning counseling to workers as part of its decision.
"We recognize the importance employees place on retirement benefits," Chrysler Senior Vice President for Human Resources Nancy Rae said in a statement. "By offering transitional financial counseling at no cost and providing diversified investment options in our participant-directed retirement and savings plans, employees can more easily manage their financial health and better prepare for the future."
In early 2012, GM made a similar move, freezing pensions for all 26,000 salaried workers in the U.S. and transitioning them to 401(k) plans. The GM workers also got an extra week of vacation and some got bigger year-end bonuses.
Contact: Nathan Bomey at 313-223-4743 or firstname.lastname@example.org.