Delphi reiterated its intention to freeze its U.S. hourly and salaried pension plans when it emerges from Chapter 11 bankruptcy protection and will need no funding waivers.
In its first-quarter earnings statement, Delphi officials also reaffirmed the companys expectation that it will be able to meet its pension funding strategy through a combination of cash contributions and transfers of certain unfunded pension liabilities to a plan sponsored by (General Motors), without the benefit of the previously issued pension funding waivers. Accordingly, Delphi has not applied to the IRS or PBGC to extend such waivers.
As part of its plan to emerge from bankruptcy, Delphi previously announced that GM will assume about $7 billion of post-retirement benefits for some of Delphis active and retired hourly employees and will assume about $1.5 billion of the unfunded liability of Delphis hourly plan.
PBGC Director Charles E.F. Millard said in a statement that Delphi executives have assured the agency the firm will retain its pension funds post-bankruptcy. The PBGC will act forcefully to protect Delphis pension plans, especially in the light of the companys decision not to seek renewal of its pension funding waivers. We will draw down certain letters of credit and keep liens in place on the companys assets until Delphi has successfully emerged and made its pension plans whole.