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PBGC deficit climbs as government seizes Delphi pension plans

November 13, 2009

PBGC deficit climbs as government seizes Delphi pension plans

Detroit News Washington Bureau

Washington — The government’s pension insurer said today its deficit climbed to $21.1 billion — $10.4 billion more than last year’s record.

The Pension Benefit Guaranty Corp., which insures the pensions of 44 million Americans, is a government-owned corporation that oversees 29,000 pension plans and has $70.2 billion in assets.

In July, Troy-based Delphi Corp. terminated its pension plans, saddling the PBGC with responsibility for the pension plans of 70,000 Delphi workers and retirees and about $6.7 billion in costs.

Delphi’s former parent General Motors spun off the parts unit in 1999. On Thursday, a U.S. bankruptcy judge approved a deal to "top off" the pensions of hourly retirees from smaller unions. GM and Delphi had already agreed to make sure that UAW retirees saw no reduction in their Delphi pensions after they were assumed by the government.

The 50,000 workers and retirees are represented by the International Union of Electrical Workers-Communication Workers of America, United Steelworkers and other smaller unions.

Older retirees will retain a $1 billion claim with the "old" GM, though it isn’t clear how much — if any of that — they will receive.

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