The NCRO was officially notified in a meeting with Fiat Chrysler that FCA has transferred a significant number of salaried retirees’ and surviving spouses’ pensions to Prudential Insurance Company of America. This was done through the purchase of a group annuity contract by FCA to pay on-going pension benefits from Prudential. The affected retirees will no longer receive their pension payments from the FCA Pension Trust. Beginning February 1, 2019, for those affected their monthly payment will come from Prudential.
Retirees affected include those with…
- A pension benefit commencement date on or before June 1, 2018
- A monthly pension payment less than $2000 from the FCA US LLC Pension Plan (FCAPP), or less than $1000 from the FCA US LLC Consolidated Pension Plan (FCON)
This annuity action will affect approximately 7000 out of around 16,000 salaried non-represented retirees (or their beneficiaries).
This type of pension transfer and other similar transfers have been done for many years by companies such as GM, Verizon, Motorola, TRW, and Sears and have been deemed legal.
We have been advised by FCA, that similar to how GM executed their annuitization, FCA negotiated with Prudential to keep the pension assets that were transferred to Prudential separate from Prudential’s assets which should protect them from creditors if Prudential were to go bankrupt.
On January 16, 2019, FCA mailed a letter to those affected retirees announcing the transfer of the pension via annuity to Prudential providing a detailed explanation of the transfer including an extensive list of Questions and Answers.
If you have received the notification as an affected retiree, the NCRO encourages you to read it thoroughly. If you have questions or concerns, the letter directs you to contact Benefit Connect at 1-888-409-3300.
If you did not receive a letter, you SHOULD NOT be affected.
For your information, we provided a link (see the last paragraph) to a copy of one of the letters. Several different versions of the letter were sent depending on the retiree’s pension plan group.
Because this is the second annuity action FCA has initiated in less than a year, the NCRO continues to do a thorough and complete investigation of annuitizations with several of our outside consultants to determine how this annuity action affects those individuals who are involved and to prepare for possible additional actions, if any should occur. While this type of annuitization action is common, the NCRO in conjunction with the NRLN is working together in our advocacy efforts in Washington D.C. to improve current laws and regulations to increase the protections retirees have in the event of being annuitized. To better understand the position the NCRO and NRLN have taken and the issues and solutions we are advocating, visit the NRLN website at www.nrln.org. Once on the site on the top menu bar go to the Legislative Agenda tab and there is a drop down. Click on the Legislative Agenda and see “Pension De-Risking by Companies” beginning on page 10. Next go to the NRLN White Papers under the Legislative Agenda tab. Then select Pension Plan De-Risking: Strengthening Fiduciary Duties to Protect Retirees. And lastly, go to the Talking Points under the Legislative Agenda tab. Then select Pension Plan De-Risking. After reviewing these documents, you will have a complete understanding of our position on this very important issue.
We will communicate more about these actions in future communications.
If you have questions or need additional information after you have contacted Benefit Connect, you can contact the NCRO by email at nchryslerro@ncro.org or call at (248) 633-2827. priority
Please visit FCA-Prudential Annuity letter to retirees to see an example of the letter mailed to those retirees that are in this latest annuity group.