Friday, October 29, 2010

Bankruptcy Chrysler Cuts Deep into pension pensioners

Editor's Note: this a correct version from one who originally appeared online.

John Hinckley eight years ago as the plant manager that oversaw the assembling the Dodge Viper retired and received a cheque for retirement, every month without fail.

Then, Chrysler LLC filed for bankruptcy reorganization 30 April and may control fell short-short-22%.

Hinckley, 68, is setting a loss of approximately $ 2,000 per month in pension after Chrysler LLC filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code. Right now, he has set to lose money for the rest of his retirement.

He is irked that he isn't always what was promised. "It's a pretty healthy cut, when someone calls and says ' Oh, we're going to take 10% of your income, ' "said Hinckley of Mendel.

Hinckley, who was the Director of the establishment Conner Avenue Assembly in Detroit from 1996 to 2001, is one of an estimated 700 managerial employees of Chrysler who are 62 and older and getting shortchanged on their pensions.

Some had pensions of $ 100,000 per year;Some were promised significantly more.

The collapse of the old Chrysler isn't just hit people on the line.Law protects pension funds required to qualified plans of the company's creditors in the bankruptcy.

But a nonqualified plan participant becomes technically an unsecured creditor in a bankruptcy.

Managers and other managers may be offered a nonqualified plan once the company and/or the employee already has hit limits on contributions to qualified financing plans. Then, bonus money or other compensation can apply to plans unqualified. woe, however, can strike once companies go through bankruptcy.

About 5% of pensioners salaried Chrysler has received few benefits from a specific plan and qualified.

Many pensioners Chrysler executives don't want to speak publicly about how much money you will lose. But privately they say smaller pension means that they are going to be forced to cut controls. John Kent, 57, was Director of engineering at the headquarters of Chrysler, Detroit, when he retired last autumn.

In may, saw $ 1,365 disappear from its Control Board immediately after the filing of bankruptcy.The money was deposited at some point during the day and then quickly taken.

The company cancelled the electronic filing of pension checks more than 1000 1st May and sent cheques two weeks later that did not contain any supplemental Executive Retirement Plan money.

He said he was "pretty nervous" after a cut of 15% for retirement.

From mid-June, but has learned that some 300 salaried retirees who were under the 62 ultimately obtain a break; their unqualified additional benefits would resume and continue until they hit of 62.

From 1 July the pensioners who are under 62 will receive retroactive payments to cover amounts SRP may, June and July, if applicable.

But the letter sent to retirees has underlined that additional benefits will cease once the pensioner reaches 62 years under this top floor.

Chrysler spokesman Michael Palese said that the company tried to adopt a socially responsible approach.

"In most failures, these benefits can basically go away," said savagely.

In General, said about 80% of unqualified benefits will be preserved.

Hinckley wants the new Chrysler to succeed, but decided that a reduction of 22% retired was too drastic.

Has filed paperwork as an unsecured creditor in bankruptcy court. "You sugarcoat a positive rotation or put on this type of treatment of pensioners unconscionable, "said Hinckley."Is theft, plain and simple ".

Contact Susan TOMPOR: 313-222-8876 or

View the original article here

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