Troy, Michigan-based Delphi Corp. will freeze its U.S. salaried and hourly defined-benefit plans Tuesday, September 30, and replace them with cash-balance or defined-contribution plans, a salaried retirement and equalization savings program, and a supplemental executive retirement plan, said spokesman Lindsey Williams.
The two plans have combined assets of about $15 billion.
The auto-parts supplier was authorized Tuesday, September 23, by a U.S. Bankruptcy Court judge to freeze the plans as part of its restructuring plan to emerge from Chapter 11 bankruptcy protection.
The change to the hourly workers’ plan requires union approval, according to court filings.
Judge Robert D. Drain of U.S. Bankruptcy Court in New York postponed until Thursday, September 25, a hearing on Delphi’s new deal with former parent General Motors Corp. that increases GM’s overall support to $10.6 billion, from $6 billion under an earlier agreement.
As part of the new deal, GM would take over responsibility for $3.4 billion of pension liabilities for Delphi’s hourly workers’ plan, up from $1.5 billion in the original agreement. According to bankruptcy court filings, a number of Delphi’s creditors object to the deal with GM.
Delphi executives are racing to secure approval for the transfer of some pension liabilities to GM by the September 30 deadline set by the Pension Benefit Guaranty Corp. or suffer “severe consequences,” according to an Aug. 14 letter sent to both firms by director Charles E.F. Millard.