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On August 10, 2009, the Pension Benefit Guaranty Corporation assumed responsibility for the pension plans of Delphi Corp. The plans ended as of July 31, 2009.
Delphi's six pension plans cover 70,000 workers and retirees. The PBGC will pay pension benefits to those individuals up to limits set by federal law. In the near future, we will contact each person in the plans to let them know about the next steps.
For more information, please see the frequently asked questions about PBGC and the limits on its guarantees, and our introductory video. In addition, we will continue to update the following answers to frequently asked questions from Delphi workers and retirees.
- Delphi was created in 1999 as a spin-off from General Motors. Why doesn't GM take back the pension plans?
- Will the PBGC reduce benefits to Delphi retirees?
- The PBGC originally announced the Delphi plans would end as of July 22, but that date has now been changed to July 31. Why did the date change?
- In 1999 GM agreed to make up any lost benefits to Delphi hourly plan workers if the hourly plan terminated and was taken by the PBGC. How does that GM guarantee fit in with the PBGC's benefits?
- I am a salaried plan retiree. Will GM make up my lost benefits as well?
- In 2008, GM took back some of the Delphi hourly plan. Some people who had been receiving a benefit from Delphi now receive their benefit from GM. What happens to them?
- Does PBGC pay health benefits for retirees?
- My pension plan features a temporary supplement to "bridge" the difference between my actual retirement age and social security retirement age. Does PBGC pay temporary supplements?
- I became eligible for additional benefits when the facility where I worked was shut down. Are the additional benefits guaranteed?
- I retired under a recent early retirement incentive program. Does PBGC guarantee my early retirement benefit?
- If my plan is well funded, will I receive a larger pension than the amount PBGC can guarantee?
Q: Delphi was created in 1999 as a spin-off from General Motors. Why doesn't GM take back the pension plans?
A: Since Delphi entered bankruptcy protection in 2005, the PBGC has worked with Delphi, GM and other stakeholders to keep all the pension plans ongoing or to have them assumed by GM. In 2008, GM did assume responsibility for a portion of the Delphi hourly pension plan, and was expected to take back the entire hourly plan. However, GM itself reorganized in bankruptcy earlier this year and now states it is unable to afford the additional financial burden of the Delphi pensions.
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Q: Will the PBGC reduce benefits to Delphi retirees?
A: The PBGC can pay benefits only up to the limits set by law. Those limits are more likely to affect early retirees and those who receive supplemental benefits. Some individuals will see reduced benefits. The PBGC cannot estimate individual benefit amounts until several months after becoming trustee of the plan.
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Q: The PBGC originally announced the Delphi plans would end as of July 22, but that date has now been changed to July 31. Why did the date change?
A: The process of transferring pension plans and their assets to PBGC trusteeship is administratively easier when done as of the end of the month. After review of the facts and circumstances in the Delphi case, we have determined that setting a termination date of July 31 for the Delphi plans will reduce administrative costs and ensure a smooth transition to PBGC trusteeship. The new date will not have a negative impact on any Delphi participants.
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Q: In 1999 GM agreed to make up any lost benefits to Delphi hourly plan workers if the hourly plan terminated and was taken by the PBGC. How does that GM guarantee fit in with the PBGC's benefits?
A: The PBGC can pay benefits only up to the legal limits.
In its news release of July 21, 2009, General Motors made the following statement about the hourly plan guarantee:
"As a result of bargaining at the time of the spin-off, General Motors Corporation did agree to top-up pension benefits for certain limited groups of hourly employees and retirees in the event that the Delphi hourly pension plan was terminated. As with other union agreements that it has assumed from the old GM, General Motors Company will honor these commitments."
Any additional benefit amounts that GM has promised to pay will come from GM. All questions about the additional guarantee should be directed to GM.
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Q: I am a salaried plan retiree. Will GM make up my lost benefits as well?
A: The PBGC is not aware of any agreement by GM to pay additional benefits to Delphi salaried plan retirees.
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Q: In 2008, GM took back some of the Delphi hourly plan. Some people who had been receiving a benefit from Delphi now receive their benefit from GM. What happens to them?
A: Delphi hourly plan participants who were transferred back to GM will continue to receive their benefit from the GM hourly plan. They will not be affected by the Delphi plan termination.
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Q: Does PBGC pay health benefits for retirees?
A: No. PBGC was established to insure benefits from defined benefit pension plans, and does not pay health or other retirement benefits. However, you may be eligible for the Health Coverage Tax Credit if you are age 55 or older.
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Q: My pension plan features a temporary supplement to "bridge" the difference between my actual retirement age and social security retirement age. Does PBGC pay temporary supplements?
A: PBGC cannot pay you more than your plan would have provided had you retired at your normal retirement age with a straight-life annuity. Click here for an example.
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Q: I became eligible for additional benefits when the facility where I worked was shut down. Are the additional benefits guaranteed?
A: If an event such as a shutdown or lay-off occurred after July 26, 2005, the additional benefits may not be fully guaranteed. The phase-in rule described in our general FAQs would treat the additional benefits as if they were first adopted by the plan on the date of the layoff or shutdown.
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Q: I retired under a recent early retirement incentive program. Does PBGC guarantee my early retirement benefit?
A: If you are receiving higher benefits because of this early retirement incentive, the additional benefits may not be fully guaranteed. The phase-in rule described in our FAQs may apply.
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Q: If my plan is well funded, will I receive a larger pension than the amount PBGC can guarantee?
A: PBGC guarantees basic benefits, regardless of the assets your plan has when PBGC takes it over. Your benefit as finally determined will not be less than the amount PBGC can guarantee.
Federal law outlines how assets from terminated pension plans are distributed, with priority given to retirees and people eligible to retire. PBGC follows specific rules to allocate pension plan assets to six priority categories (PC1 through PC6). PBGC allocates the plan's assets to benefits owed in each category, in this priority order, until all of your plan's assets are allocated, so you may receive benefits above what PBGC guarantees.
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Delphi Plans that PBGC Insures
| Delphi Hourly-Rate Employees Pension Plan | 383430473 | |
| Delphi Retirement Program For Salaried Employees | 383430473 | |
| ASEC Manufacturing Retirement Program | 731474201 | |
| Delphi Mechatronic Systems Retirement Program | 383589834 | |
| Packard-Hughes Interconnect Bargaining Retirement Plan | 330595219 | |
| Packard-Hughes Interconnect Non-Bargaining Retirement Plan | 330595219 |
