Chrysler to freeze salaried employees’ pensions in effort to limit liability

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http://www.washingtonpost.com/business/economy/chrysler-to-freeze-salaried-employees-pensions-in-effort-to-limit-liability/2013/06/14/e981b41e-d521-11e2-a73e-826d299ff459_story.html

Chrysler plans to freeze pensions for 8,000 salaried employees at the end of the year, the automaker announced Friday, joining a growing group of companies seeking to limit the amount of money they have to set aside now for future retirees.

The move means that salaried workers in the company’s pension plan, which pays retirees a fixed benefit for life, will stop accruing new benefits at the end of 2013. They remain entitled to the pension benefits they have earned so far, but instead of adding to the guaranteed payments they will receive at retirement, the workers will be offered 401(k) accounts, which shift the risk of saving for retirement from employers to employees.

Chrysler's decision comes after a similar one by General Motors, which last year froze pensions for 26,000 salaried workers in the United States, moving them to 401(k) plans.

Chrysler's move does not affect retirees or 27,000 hourly workers in the United States, whose retirement benefits are negotiated in contracts with the United Auto Workers union. Chrysler had already stopped offering traditional pensions to new salaried employees, who instead were offered 401(k)s, although salaried workers already with the company were allowed to remain in the pension plan.