TROY, Mich.—Financially troubled auto parts manufacturer Delphi Corp. said it intends to shed its underfunded pension plan for salaried employees and retirees as part of a plan to emerge from bankruptcy reorganization.
In a filing Monday with the Securities and Exchange Commission, Troy, Mich.-based Delphi, which intends to sell many of its assets to a private equity firm, said it explored a number of alternatives for the pension plan, but none proved “feasible.” As a result, it said it does not expect to continue the plan and that the Pension Benefit Guaranty Corp. will take over the plan.
The plan, which Delphi froze last year, had just more than $2 billion in unfunded benefits at year-end. It wasn't immediately known how much of those benefits would be guaranteed by the PBGC.
A PBGC spokesman said the agency will continue to work with all parties involved in the Delphi pension plan for salaried employees and retirees.
A PBGC spokesman said the agency will continue to work with all parties regarding the Delphi pension plan.
Under an earlier agreement with General Motors Corp., Delphi's former parent, GM agreed to assume liabilities of Delphi's pension plan covering hourly employees in exchange for certain financial considerations.
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