Key Events Leading To The Termination Of The Delphi Defined Benefit Plans PDF Download

"The Pension Benefit GuarantyCorporation (PBGC) terminated theunderfunded six qualified definedbenefit (DB) plans of the DelphiCorporation, a former subsidiary ofGeneral Motors (GM), in July 2009.Given questions about how PBGCcame to terminate the plans, whethertreatment for certain Delphi workerswas preferential, and the role of theU.S. Department of the Treasury(Treasury) in these outcomes, GAOwas asked to answer the followingquestions:(1) What precipitated PBGC's decisionto terminate Delphi's plans and whatwas Treasury's role, if any? (2) What actions did PBGC take tosecure Delphi domestic and foreignassets as part of its recovery process? (3) Why will certain Delphi employeesreceive reduced pension benefits andothers will not?(4) What information wascommunicated to employees about thetermination of their plans?GAO issued a timeline of key eventsleading to the plans' termination inMarch 2011 (GAO-11-373R). Toexamine the issues more fully for thisreport, GAO analyzed additionalinformation from PBGC, Treasury, GM,Delphi, and Delphi employee groupsand unions, and interviewed representatives from thoseorganizations. For comparisonpurposes, GAO also reviewed thetermination and recovery processes forall ten firms with the largest terminationclaims from plans trusteed by PBGC.Treasury's comments generally agreedwith GAO's findings and conclusions. What GAO FoundAs a result of the termination of Delphi's pension plans in July 2009 and statutorybenefit limits, many Delphi retirees will receive less from PBGC than their fullbenefit promised by Delphi. However, some of those experiencing statutoryreductions will still receive their full benefits because of union agreements withGM. With respect to PBGC's role in the process, the steps taken to terminate theplans and reduce some benefits according to statutory limits are consistent withPBGC's usual actions when terminating large plans.