DOW JONES NEWSWIRES
Pension Benefit Guaranty Corp. said Wednesday it would take over
the responsibility for the pension plans of 70,000 workers and
retirees from Delphi Corp. (DPHIQ).
In a filing last month of modifications to its bankruptcy plan,
the auto-parts maker said changed economic circumstances would no
longer allow it to continue to fund its defined benefit pension
plans after its emergence from bankruptcy. The company also said at
the time it expected the PBGC would take over the plans.
Most of Delphi's creditors rejected its plan to sell its assets
to General Motors Co. and private-equity firm Platinum Equity,
although the PBGC was among those who approved it. Delphi said
Tuesday it will still pursue the plan as it tries to leave
bankruptcy.
A group of Delphi retirees filed suit last week, saying it needs
an independent administrator to help stop the company from
terminating the plan and transferring the obligation to the
PBGC.
The PBGC said it expects to be responsible for about $6.2
billion of the company's two largest pension plans' shortfalls,
which are expected to be more than $7 billion. It said it will also
be responsible for $50 million in underfunding for the other four
smaller plans.
It said it will pay pension benefits up to the limits set by
law, which in 2009 for a 65-year-old is $54,000 a year.
Delphi, which was spun off from GM in 1999 and filed for
bankruptcy in 2005, has been hurt by industry woes and has
struggled for more than a year to pull together the financing it
needs to exit bankruptcy.
-By Kerry Grace Benn, Dow Jones Newswires; 212-416-2353;
kerry.benn@dowjones.com