Blogging Employee Benefits

April 1, 2006

Delphi Pensions To Be Frozen

Filed under: Pensions — Fuguerre @ 8:16 am

The company said it will also be necessary to obtain relief from the Pension Benefit Guaranty Corporation, Internal Revenue Service, Department of Labor and potential congressional action in order to amortize funding contributions over a longer period in its transformation plan than may have previously occurred.

Bankrupt auto parts supplier Delphi has announced a comprehensive transformation plan that includes freezing its defined benefit pension plan for hourly workers as of 10/1/2006 and its defined benefit pension plan for salaried workers as of 1/1/07. [8-K Filing] As of 12/31/04, the date of the most company's most recent financial statement, the two pension plans reported assets of $8.5 billion against accumulated benefit obligations of $12.4 billion, but increased early retirement of Delphi employees is expected to significantly boost the pension deficit.

Replacement defined contribution plans will provide company contributions and matching contributions. Other employee benefit changes for salaried workers include increased cost-sharing in the company-sponsored health plan.

1 Comment »

  1. But we may see a strike (which in turn could take down GM) out of this before the ice age actually freezes the hourly workers. See the UAW's statement responding to Delphi's plan.

    Comment by Fuguerre — April 1, 2006 @ 9:54 am

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