Giant automaker Chrysler is planning to freeze its pension plan for U.S. salaried workers by December 2013, a move that would affect thousands of current workers, according to Detroit Free Press.
This coming after General Motors made a similar decision about its pension plan only a year ago.
Starting in 2014 salaried employees who have already built a pension will no longer be able to accrue further benefits, but the pension they have already established will not see changes.
According to The Washington Post the move would offer Chrysler employees 401(k) accounts instead of continuing to offer secure, fixed payments once the worker completes their time at the company, positioning retirees for greater risk, moving the headache away from employers and into the hands of employees.
The automaker released a statement on Friday saying the move is "consistent" with the market as it moves forward, and they would provide additional financial counseling to assist employees with the transition.
Chrysler said the move was done "in order to comply with IRS regulations."
"Nearly ten years ago, to help mitigate unpredictable financial costs and consistent with industry trends, Chrysler closed pension plans to new participants," Nancy Rae, Chrysler's senior vice president of human resources, said in a statement. "We recognize the importance employees place on retirement benefits.
"By offering transitional financial counseling at no cost and providing diversified investment options in our participant-directed retirement and saving plans, employees can more easily manage their financial health and better prepare for the future," she wrote.
In The Post's report, The Pension Benefit Guaranty Corp., the government agency that insures private-sector plans, conducted a survey and said the number of plans for individual employers dropped from 112,208 in the 1980s to 25,600 in 2011, pushing many private employers to save money on their end and offer employees 401(k) accounts as a retirement option.