CHRYSLER PENSION PLANS

Below is the December 31, 2008 funded status of Chrysler's major tax qualified pension plans (excluding Jeep UAW) as shown in the new federally required funding report issued in May, 2009. The chart shows that Chrysler pension plans are underfunded by $1.9B as of 12-31-08. The chart shows our pension security following Federal ERISA requirements, which assumes the plans continue in operation. In case Chrysler fails and the plans are terminated, the PBGC calculation will prevail, which are significantly different from these numbers. The PBGC's calculations assume the plans are terminated, The PBGC has publically said that Chrysler's pension plans are underfunded by over $9 Billion. However, the PBGC has refused to provide us the funding information by individual Chrysler pension plan, and has also refused to provide detailed information comparing their funding calculations with those used by the plans in preparing the new annual funding report and the plans' annual reports.

PENSIONS

Benefits may be received from one or more of the following plans:

Tax Qualified Plans

• Benefits

          Chrysler Pension Plan (CPP)

• Basic Benefit – Rate times years of service
• Early Retirement Supplemental

          Chrysler Salaried Employees’ Retirement Plans (SERP or E-SERP)

• Contributory Benefit
• Final Average Salary Benefit
• Certain SRP benefits were transferred to SERP/ESERP

• Funding (See Status Below)

• Funded in a tax qualified trust managed by independent advisors
• Assets are exclusively for plan participants
• Assets not available to Chrysler, or, in the event of Chrysler bankruptcy, Chrysler creditors
• Benefits guaranteed (up to a maximum) by the Pension Benefit Guaranty Corporation (PBGC),
  an agency of the U.S. Government (See below)

Non-Tax Qualified Plan

     Chrysler Supplemental Executive Retirement Plan (SRP)
Benefits

• ERISA Excess – Benefits payable under SERPs which exceed ERISA limitations for tax qualified plans
• Incentive Compensation Retirement Benefits

Payment/Funding

• Benefits are a promise to pay by Chrysler and are at risk except as described below
• Annuities- Certain benefits were annuitized. Annuities were purchased from Hartford Insurance Company. The only risk for these benefits is the viability of Harford.
• Rabbi Trust- The benefits which were not annuitized were partially funded in a Rabbi Trust. These assets are dedicated to the payment of SRP benefits (cannot be reached by Chrysler) but are available to Chrysler’s creditors in the event of a Chrysler bankruptcy.
• Certain SRP benefits were transferred to SERP/ESERP

PBGC GUARANTY

• Applicable only to tax qualified defined benefit pension plans such as the Chrysler Pension Plan and the Chrysler SERPs. It is not applicable to non-tax qualified defined benefit pension plans such as the Chrysler SRP or to defined contribution plans such as the Chrysler Salaried Employees’ Savings Plan.
• SEE PENSION BENEFIT SECURITY BELOW

PENSION BENEFIT SECURITY (PBGC)
(more information about plan termination here)

Pension benefit is paid from funded trust

  In event of bankruptcy

• If Plan is fully funded , benefit continues
• Usually, in event of bankruptcy, plan is taken over by PBGC
• PBGC guaranty annual maximum (2009 termination)
  (Based on age of retiree at date of bankruptcy filing and adjusted for terms (form) of benefit.)

see this link for more information on maximum payments

Age	Straight Life Annuity	Joint & 50% Survivor Annuity
75	$164,160	$147,744
70	$89,640	$80,676
65	$54,000	$48,600
60	$35,100	$31,590
55	$24,300	$21,870

          PBGC Priority Categories

• Return of employee contributions
• Retirement benefits in pay status (or eligible) three years before termination date
• Basic benefits that do not exceed maximum PBGC guarantee
• Other nonforfeitable benefits
• Forfeitable benefits (early retirement supplements)

Links to pension articles

Auto Sector Pension Plans:Information for Workers and Retirees Available on the PBGC website