Statement by PBGC Interim Director on Additional Financial Protection Obtained for Chrysler Pension Plans
FOR IMMEDIATE RELEASE
May 17, 2007
WASHINGTON-Vince Snowbarger, interim director of the Pension Benefit Guaranty Corporation, issued the following statement today:
"As the insurer of American workers' defined benefit pension plans, the PBGC monitors corporate transactions that might jeopardize the financial security of those plans and arranges suitable protections for the pension plans and the pension insurance program. When Daimler Chrysler was nearing agreement with an affiliate of Cerberus on the sale of its North American Chrysler operations, the company and Cerberus entered into discussions with the PBGC on providing protection for the Chrysler pension plans.
"Both Daimler and Cerberus have made significant financial commitments to strengthen Chrysler pensions. Daimler has agreed to provide a guarantee of $1 billion to be paid into the Chrysler plans if the plans terminate within five years. Under its new ownership capitalized by Cerberus, Chrysler will make $200 million in pension contributions over the next five years above and beyond the legally required minimum. I commend both Daimler and Cerberus on their willingness to work with the PBGC to protect the retirement security of Chrysler workers and retirees."
The PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974. It currently guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in over 30,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and by investment returns.
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PBGC No. 07-23