How will a Chrysler widows pension be affected by what is going on right now with the auto industry?
In general, her pension is probably pretty safe. Both union and salaried plan pensions are covered by a gov’t agency called the Pension Benefit Guarantee Corporation (PBGC). This agency receives premium payments every year intended to build up a fund to guarantee pension plans from bankrupt employers. In many situations, when the company liquidates itself, the PBGC steps in and takes over the plan. You’d hear about this if it happened but would notice no change except that the payer of the monthly check would change. Note that the protection is limited however. For a non-union worker or a union worker in a plan solely sponsored by Chrysler, a pension of up to about $50,000/year is guaranteed (assuming retirement today). The widow’s benefit is unlikely to be that high unless the deceased was an executive or other high paid employee. For union sponsored plans, the protection is typically much lower and structured differently. So if the deceased employee was a Teamster there issue is less
