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Ailing Chrysler's pensions underfunded
Denver Post Wire Services
Wednesday, May 20, 2009

Bankrupt Chrysler's pension plans may be underfunded by more than $10 billion, the federal Pension Benefit Guaranty Corp. has estimated.

If the pensions are terminated, the agency's claim for the shortfall in the automaker's bankruptcy case "would exceed $9 billion," Chrysler lawyers said in a filing Tuesday in U.S. Bankruptcy Court in New York.

Chrysler wants to make a deal with the company, the PBGC, Cerberus Capital Management and Daimler to partly fund the plans and avoid such a termination.  Chrysler's proposed sale would erase Daimler's $1 billion guaranty securing the pensions, according to the filing.

Under the proposal, Daimler will make $600 million in planned cash contributions to the pensions while reducing its $1 billion pension guaranty to $200 million.

Bloomberg News