Retired Chrysler salaried workers are angry that a one-time company pension payment -- offered when the automaker eliminated life insurance -- buys them little in the way of death benefits.

Retirees learned in March that Chrysler LLC planned to end their company-funded life insurance policies, part of a wider-cost cutting strategy by the Auburn Hills automaker. The benefit was equal to a worker's last year of pay for those who left before 2003, or $50,000 for those who retired after that. The change does not affect blue-collar retirees.

Along with cutting life insurance, Chrysler separately gave retirees a one-time pension payment of up to $4,000 and an opportunity to buy life insurance at group rates from MetLife. Chrysler executives said that although the money could be used to buy life insurance, the payment and the loss of life insurance benefits were not related.

Retirees learned this month that the payment won't buy much coverage, though many had hoped to use it for that purpose.

"The benefit reductions are unjust and zeroed in on salaried workers," said Chuck Austin, 66, who is president pro tem of a newly formed organization, the National Chrysler Retiree Organization, which aims to prevent future benefits cuts by the automaker.

According to documents sent to retirees and obtained by The Detroit News, a 70-year-old retiree with an approved statement of health would pay $103 per month for a $50,000 MetLife policy -- so the $4,000 would buy 38 months of coverage. For an 80-year-old retiree, $4,000 would buy less than two years.

Retirees who do not submit medical backgrounds or whose statement of health is not approved by MetLife have their policy capped at $20,000 of coverage and pay higher premiums. Since private equity firm Cerberus Capital Management LP acquired Chrysler last year, the automaker has worked aggressively to cut costs, doing everything from eliminating shifts and vehicle lines to reducing retiree benefits and seeking savings from suppliers.

The cuts facing white-collar retirees come on top of health care benefit reductions in 2006.

Austin, a Lake Orion resident and ex-Chrysler engineer, hopes the new group, already with some 200 members, can establish regular communication with Chrysler executives. Their hope is that a united voice can ward off further cuts. The group plans to publicize its grassroots efforts among Chrysler's 14,000 white-collar retirees.

Chrysler said the benefit changes align the automaker with two-thirds of the country's 1,000 largest corporations that do not offer their workers post-retirement life insurance.

"Chrysler is trying to ease the transition for current and future retirees from doing business where Chrysler administers such programs to a new way of doing business, where other companies take on that administration," said Chrysler spokesman David Elshoff.

Such a change allows Chrysler to focus on its "core business," he said.

Retirees said they counted on the life insurance to help a spouse adjust to lower pension payments after their death or to pay off mortgages to make it easier for their children to inherit property.

William Webb, 77, a retiree from Warren, said he would have invested differently had he known Chrysler would cut benefits that had been promised upon his departure.

"I could have found my own insurance when I retired and it would've been a lot cheaper," he said. "I guess I should be happy they covered me for 16 years. Unfortunately for them, I'm still living."

Don Bachelder, a 65-year-old retiree from Hudson, Fla., said he is frustrated by the high price and that he couldn't continue the same level of benefits with MetLife without having to submit a new medical history.

"These were benefits earned when I worked 35 years for Chrysler," he said "For the new Cerberus-Chrysler to come in and do this is wrong."

Some retirees and a benefits expert said the rates MetLife offers are not significantly better than what could be found in the open market. Retirees who can't afford the coverage must decide whether to look for other insurance or adjust their lifestyles to raise savings, said Marc Wise, an employee benefits attorney and partner at the Southfield-based law firm Maddin Hauser.