I just heard that PBGC made almost 600 million dollars when Delphi purchased PBGC’s ownership interest in the company. How will this affect my benefit?
While PBGC is pleased with this transaction, the dollars we will receive are less than 10% of the amount that we need to fund the benefits. PBGC doesn't know how this action will affect benefits.
Why is that?
Most participants will receive their full benefit because the benefit they were entitled to at the time their plan terminated was smaller than the amount that PBGC guarantees. A pension plan’s assets only come into play when the benefit you earned under the plan is larger than what PBGC guarantees. If you are receiving your full benefit, this transaction will have no effect on your benefit.
What about those participants who did not get their full benefit?
The most likely group to be helped by the additional money is those who retired or could have retired by July 31, 2006, 3 years before the plan ended. This is because any additional monies PBGC receives will go first to these participants. However, because the amount we will receive is such a small percentage of what PBGC needs to pay benefits, any benefit increases to these participants will be very small.