Benefits July 17, 2009

Delphi Retirees Try to Block PBGC Takeover

July 17, 2009 (PLANSPONSOR.com) - A retiree group at bankrupt auto parts supplier Delphi Corp. has gone into federal court in an effort to block company plans to terminate salaried employees' pension plan and transfer it to the private-sector pension insurer.
Reported by

A Dow Jones news report said the suit filed by theDelphi Salaried Retiree Association in Michigan demands that an independent administrator be appointed to better represent the workers’ interests. The suit also requests the court temporarily block the transfer of the plan to the Pension Benefit Guaranty Corporation (PBGC) until the issues raised by the case are worked out.

“We have serious concerns about whether Delphi executives can protect our pension rights while at the same time serving Delphi’s shareholders and creditors,” the retiree group said, according to Dow Jones.

Separately, the group also filed an objection in U.S. Bankruptcy Court to a provision in Delphi’s reorganization plan stating the pension plan would be transferred to the PBGC.

One condition of a agreement for General Motors to buy Delphi out of bankruptcy is that Delphi will not be on the hook for unfunded pensions for its hourly workers, an amount that totals about $3.2 billion, according to the Dow Jones report. GM, Delphi and the PBGC are negotiating an agreement by which GM would assume some or all of those pension costs, court document show.

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