Chrysler Group LLC, Auburn Hills, Mich., will freeze its U.S. defined benefit pension plans for salaried employees effective Dec. 31, the company announced Friday
According to a company statement, the decision to freeze the plans was “to comply with IRS regulations and (be) consistent with industry trends.”
Beginning Jan. 1, the company “will begin making contributions in a defined contribution plan on behalf of eligible salaried employees,” according to the statement.
The company also lowered the qualifying age for full accrued retirement benefits to 58 from 62 for employees in DB plans retiring on or after Jan. 1.
The plans were closed to new hires effective Dec. 31, 2003. A new defined contribution plan called the Employee Managed Retirement Plan was created for salaried employees hired on or after Jan. 1, 2004.
Spokeswoman Shawn Morgan said employees hired before Jan. 1, 2004, who are now in the DB plans will go into that plan.
As of Dec. 31, Chrysler Group LLC had $26 billion in total pension plan assets and $34.8 billion in projected benefit obligations, for a funding ratio of 75%, according to the company's most recent 10-K filing.
Ms. Morgan said the company does not provide asset information on individual plans.