Chrysler, following the lead of General Motors, said it would rein in pension costs by freezing the pensions of its salaried employees by the end of the year. The pensions of retirees are not affected, the company said.
The freeze affects about 8,000 U.S. salaried employees. The workers won't lose accrued pension benefits, the U.S. automaker said.
The freeze takes effect Dec. 31, Chrysler said in a statement, noting that the move is "consistent with industry trends" designed to limit pension costs.
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General Motors froze its pensions last year. GM and Ford Motor Co. have also offered to buy out retirees' pensions as a cost containment measure, the Detroit News reported.
Chrysler said employees who are eligible to retire and do so on or after Jan. 1, 2014, will receive 100 percent of their accrued benefit beginning at age 58, versus age 62.
In the meantime, the company will offer counseling to employees to help them better prepare for retirement.
"As we move forward, Chrysler Group will provide comprehensive tools and resources to help employees make decisions about their retirement readiness," said Nancy Rae, Chrysler's human resources vice president.
"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."
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
