TROY, Mich. -- Delphi Automotive Systems Corp. this month made a $325 million voluntary contribution to its hourly defined benefit plan.
But the company has $1.2 billion to go before the $4.6 billion plan is fully funded. As of Sept. 30, its unfunded liability was $1.5 billion, according to documents filed with the Securities and Exchange Commission. The contribution brings the company's total 1999 voluntary contributions to $1.2 billion.
Executives at Delphi, the automotive concern that was spun off from General Motors Corp., had promised in May to make a total of at least $1.8 billion in contributions by early 2000.
Delphi's $2.36 billion salaried employees defined benefit plan was 105% funded as of Sept. 30, said Peter Rowe, Delphi's manager of media relations. In April, that plan had an unfunded liability of about $100 million.
"Our intent continues to be to fully fund our current hourly pension benefits over the next few years on an economic basis," Delphi's Sept. 30 SEC filing stated.
But Delphi has come a long way since its split from General Motors, when the unfunded liability for both defined benefit plans was a combined $2.2 billion.
Deadline extended
Union accords reached in September extended to Jan. 1, the date by which eligible Delphi participants can retire under the GM pension plan, said Steve Gault, a Delphi spokesman.
Delphi employees who retire before Jan. 1 will receive their pension and health care coverage from GM. GM employees who became Delphi employees after the May 28 spinoff, as well as Delphi employees who became GM employees, who retire after Jan. 1 will receive part of their pension from the Delphi pension plan and part from the GM plan, Mr. Gault said.
In January, Delphi executives plan to release their fourth-quarter 1999 financial data, which likely will include adjustments to pension obligations based on the difference between the estimates of the number of union members likely to retire this year and the number who actually did. These adjustments could result in cash payments to GM, which "may be significant," according to the SEC documents.
For the next few years, administration of Delphi's two defined benefit and two defined contribution plans will stay with General Motors Investment Management Corp., New York, SEC documents state.
Executives at Delphi also have added three funds to create a menu of 72 investment options in its two defined contribution plans, which have $2.8 billion in combined assets, Mr. Rowe said.
The new investment options are the Domini Social Equity Fund, the Neuberger Berman Socially Responsive Trust and Promark Social Equity Fund, Mr. Rowe said.
Delphi's 401(k) plans still mirror those of General Motors, Mr. Rowe added. One of the few differences is that the GM company stock option has been replaced by Delphi company stock. Within five years of the spinoff, all shares of GM stock in Delphi employees' 401(k) accounts will be sold and the proceeds will be allocated to the Promark Income fund, Mr. Rowe said.
Delphi has retained Fidelity Investments, Boston, as record keeper, and State Street Bank & Trust Co., Boston, as trustee; both firms serve the same functions for GM's plans, he said.
Sticking with GM
According to SEC documents, GM matches an employee's contribution to its 401(k) plans in cash up to 6% of compensation to an annual limit of $3,000. For salaried employees, Delphi matches 70% of employees contributions up to 6% of eligible salary.
Right now, there is only $400 million in Delphi's hourly defined contribution plan, Mr. Rowe said. Under the agreement with the United Autoworkers Union, one of three unions representing Delphi employees, UAW members have the option of keeping the bulk of their 401(k) assets in the GM plan or moving their balances to the Delphi plan, he said.
The union accord also allows members who go to Delphi from GM to move their 401(k) account balances to Delphi from GM and then back to GM's plan if the union member returns to GM or retires before Jan. 1.
