Will Your Pension Be Protected?
A fully funded U.S. pension plan has long been a goal of the National Chrysler Retirement Organization (NCRO). This is great news, however, another trend in U.S. industry generally regarding pension plans could have a substantial impact on our pensions: “de-risking.”
Pension de-risking happens when a company sells its fully-funded pension plan(s) to an insurance company and then takes the financial obligation off their books. When a company sells the plan, the insurance company converts the retiree benefit into an annuity. While recipients don’t lose their money they do lose federal protection from the Pension Benefit Guaranty Corporation (PBGC) and the Employee Retiree Income Security Act (ERISA).
Although FCA US LLC. has previously annuitized some U.S. salaried retirees, the NCRO does not have a window into the company’s plans for the fully funded pension plan. We’re watching carefully for any developments in this area and will discuss de-risking with FCA US LLC. leadership when appropriate. Of particular concern is the reality that, as insurance products, annuities are not protected should the insurance company default. They are presently governed only by the patchwork of state laws that regulate the insurance industry.
So what can you do? Help the NCRO protect your pension as we monitor these developments and work with
the NRLN on legislative initiatives by
As always, we will keep you informed.
