[Excerpt] The Pension Benefit Guaranty Corporation (PBGC) terminated the underfunded six qualified defined benefit (DB) plans of the Delphi Corporation, a former subsidiary of General Motors (GM), in July 2009. Given questions about how PBGC came to terminate the plans, whether treatment for certain Delphi workers was preferential, and the role of the U.S. Department of the Treasury (Treasury) in these outcomes, GAO was asked to answer the following questions:
(1) What precipitated PBGC’s decision to terminate Delphi’s plans and what was Treasury's role, if any?
(2) What actions did PBGC take to secure Delphi domestic and foreign assets as part of its recovery process?
(3) Why will certain Delphi employees receive reduced pension benefits and others will not?
(4) What information was communicated to employees about the termination of their plans?
GAO issued a timeline of key events leading to the plans’ termination in March 2011 (GAO-11-373R). To examine the issues more fully for this report, GAO analyzed additional information from PBGC, Treasury, GM, Delphi, and Delphi employee groups and unions, and interviewed representatives from those organizations. For comparison purposes, GAO also reviewed the termination and recovery processes for all ten firms with the largest termination claims from plans trusteed by PBGC.
Treasury’s comments generally agreed with GAO’s findings and conclusions.