For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.
Administration September 13, 2010
Former Chrysler Employees Sue for Lost Pensions
September 13, 2010 (PLANSPONSOR.com) - Former Chrysler and DaimlerChrysler employees who lost some of their pensions with the bankruptcy of the former Chrysler LLC have filed a lawsuit against Daimler AG and Cerberus Capital Management LLP.
Reported by Rebecca Moore
The Detroit News reports that the suit represents more than 450 former employees and managers who lost supplemental pensions during Chrysler’s reorganization and bankruptcy last year. The pension accounts were not transferred to the new Chrysler Group LLC that was formed after bankruptcy with partner Fiat SpA.
The guaranteed pensions were set up by the company as a private benefit, and therefore not protected by the Pension Benefit Guaranty Corp.
The former employees are suing DaimlerChrysler and Cerberus because DaimlerChrysler was the owner of the automaker until it sold it to Cerberus in 2007, and Cerberus ran the company until bankruptcy.
“The direct financial loss, in combination with the serious reduction in medical, health care and auto benefits resulting from the bankruptcy, is causing them to make drastic changes to their retirement plans at a time when they can’t go out and find other jobs to supplement their incomes,” said an attorney for the former employees, according to the news report.
Cerberus spokesman Peter Duda told the Detroit News that the company does not comment on pending litigation.« Abercrombie & Fitch Hit with 2nd Suit over Religious Head Scarf