Fiat, Chrysler Pension Contributions?

From a NCRO member:

When is NCRO going to discuss/ explain as best they can why/how Fiat did not contribute to the Pension plan last year?
Why is Fiat allowed to do this?
Also, what happens in 5 years when, I believe, they must pay all monies do to bring up the pension plans to 100% funded according to U.S. law?
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Protect pensions and other retiree benefits, Do our part to keep Chrysler LLC viable and strong, Inform, Educate and Communicate, Support American workers, jobs and products, Build camaraderie and fellowship
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4 Responses to Fiat, Chrysler Pension Contributions?

  1. ncro says:

    From the NCRO:
    First, we need to understand that the Chrysler pension plans are sponsored by Chrysler Group LLC and any funding requirements for the plans are the responsibility of Chrysler Group LLC and not Fiat which is only a shareholder in Chrysler Group LLC.

    In regard to the lack of contributions to the Chrysler salaried pension plans during the past few years, I would refer NCRO members to the schedule attached the May newsletter which shows that Chrysler’s cumulative contributions to it’s salaried pension plans as of 1/1/2010 exceeded the plans’ cumulative ERISA minimum funding requirements by about $1.5 Billion- $896 Million for the Pension Plan, $364 million for SERP and $277 Million for ESERP. These excess contributions can be used by Chrysler to apply to the plans’ minimum funding requirements for 2010 and future years. Although the plans’ 2010 annual reports will not be issued until 10/15/2011 (as required under ERISA) I would expect they will show that Chrysler used the plans’cumulative excess contributions to cover the plans’ minimum funding requirements.

    I would also point out that as of December 31, 2010, as shown in the plans’ 2011 Annual Funding Notices distributed to plan participants in April, 2011, the SERPs were both over funded on an ERISA basis- 102% for SERP and 105% for ESERP and that the Pension Plan was 83% funded.

  2. Mark Brackon says:

    The NCRO is not looking after the best interest of the pension plan if they think that the pension plan strategy of Chrysler/Fiat is to become a Foreign Company and therefore not subject to ERISA laws. I believe Fiat goal is to turn all pension plans over to the PBGC. NCRO needs to take action.

  3. Everything I’ve ever read about what happens when pension plans are turned over to the PBGC is very scary for individuals with very healthy pensions. It seems that NCRO should be working to prevent this from happening.

    • NCRO says:

      We at the NCRO completely agree with you that our pensions are the highest priority. Just so you know we have an active group of our board members that lobby our senators and congressmen quarterly to address this issue. We also are members of the NRLN another retiree group that is 30,000 strong that supports our activities. We have also met with the PBGC several times over the last several years to give them input on the procedures they use in calculating pension evaluations and payouts if the company turns the pension over to the PBGC. One of the principle issues is the fact that the PBGC uses an internal “termination formula” to calculate payouts that is not congruent with the annual ERISA statement that the government mandates pension sponsors send to retirees. In fact the formula the PBGC uses is much less. And the guarantees for retirees have top end limits (similar to the FDIC for example) with caps based on age.

      In addition we send to our membership “Action Alerts” which request members send letters to their congressmen to change some of these issues to make them work better for salaried retirees. I hope you respond to these “Action Alerts” when you receive them.

      I hope this answers your question. Yes, we at the NCRO have PBGC reform and pension protection as a top priority and we work regularly on resolving it. If you would like to take a more active role please let us know.

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