Tuesday, April 1, 2008

Surplus in pension fund rises

Overfunding of Chrysler LLC's U.S. pension fund appears to be growing.Chrysler's U.S. pension fund is overfunded by $3.1 billion, the automaker said Monday.

When a controlling stake in Chrysler was sold to Cerberus Capital Management last August, the pension fund was overfunded by $2 billion. That money is being tapped for early-retirement payouts, allowing UAW members to take payments as 401(k) rollovers to defer taxes.

The new funding level was disclosed in response to a Free Press question about annual lump-sum payments promised to UAW retirees.

Chrysler's UAW retirees are to receive four lump-sum payments through the life of the 4-year contract, according to information the union gave its members last October.

By Tim Higgins

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