At the end of this year Chrysler will freeze its pension plan for salaried employees in the US, after GM took the same decision one year ago.
The decision affects the 8,000 salaried employees, but not the hourly workers or the retired employees. More than a decade ago Chrysler stopped offering pensions for new employees, therefore beginning with December 31st, 2013, Chrysler’s 8,000 workers who have earned a pension will not accrue additional benefits and only keep the pension they have earned until that date.
Beginning with 2014 these workers will be transferred to a defined contribution plan, the same offered to all employees hired starting with January 1st, 2004. The automaker also announced it will offer retirement planning counseling to employees as part of this move. In 2012 GM froze pensions for all its 26,000 employees in the US and transferred them to 401(k) plans.
“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.”