According to a Pension Benefit Guaranty Corporation (PBGC) announcement, the former Ford Motor Company subsidiary initially considered terminating three of its four pension plans and shifting the obligations to the PBGC’s insurance program.
The PBGC said the move would have caused $100 million in benefit reductions for the company’s 22,000 workers and retirees. The pension transfer also would have added more than $500 million to the PBGC’s shortfall.
“Under the plan approved today, Visteon’s 22,000 workers and retirees will continue to receive the full benefits they’ve earned,” said PBGC Director Joshua Gotbaum, in the news release. “Everyone at the PBGC worked hard to preserve the plans and we’re pleased that the company can reorganize while keeping its pension commitments.”
Visteon, an auto-parts supplier based in Van Buren Township, Michigan, filed for Chapter 11 protection in the U.S. Bankruptcy Court on May 28, 2009.
Last December, the PBGC called publicly for the company to retain its pension programs as active entities (see PBGC Urges Visteon to Keep Pension Plans).