Chrysler recently announced it will be freezing pension plans for salaried workers, further expanding the trend once reserved for employers claiming extreme financial distress.
By December 31, 2013, some 8,000 salaried Chrysler workers who have earned a pension will no longer accrue additional benefits. While they will get to keep the pension benefits they’ve already earned, they will be transitioned into a 401(k).
The move comes after a similar one made by General Motors a year ago, and 10 years after Chrysler stopped offering pensions to new hires altogether.
The motor companies’ actions, in fact, mirror those of many financially healthy employers across the nation as businesses seek to undermine worker pensions and go back on their promise of a secure retirement after a lifetime of work for their workers. 401(k)s, or defined contribution plans, are far less secure than pensions and are much more susceptible to the ups and downs of the fickle stock market.
“Employers are trying to get out of the pension business,” said IAM General Secretary-Treasurer Robert Roach Jr. “What used to be a deviously-attempted SOS is quickly becoming basic business practice. And we won’t stand for it. In the IAM, and labor unions in general, we don’t give away pensions. We fight for pensions and pension security.”
Members of the House Health, Employment, Labor and Pensions (HELP) Subcommittee are currently working to amend the nation’s multiemployer pension plan system, especially as the Pension Protection Act of 2006 is due to expire in 2014.
As the debate continues, IAM leaders are working to ensure the voices of working families are heard loud and clear.
“Americans are rightly concerned about their financial futures,” said IAM International President Tom Buffenbarger in a letter to President Obama in April. “Allowing draconian cuts in retirement benefits will not ease these concerns nor provide for a more secure retirement. I respectfully request your support in stopping any proposal that cuts the hard-earned benefits of working Americans.”