DELPHI 2011 Annual Report Download - page 70

Table of Contents
plans are funded. In addition, we have defined benefit plans in South Korea, Turkey and Italy for which amounts are payable to employees immediately upon
separation. The obligations for these plans are recorded based on the vested obligation. We anticipate making required pension contributions of approximately
$55 million in 2012.
Delphi sponsors a Supplemental Executive Retirement Program ("SERP") for those employees who were U.S. executives prior to September 30, 2008
and were still U.S. executives on October 7, 2009, the effective date of the program. This program is unfunded. Executives receive benefits over 5 years after
an involuntary or voluntary separation from Delphi. The SERP is closed to new members and was frozen effective September 30, 2008. Refer to Note 13.
Pension Benefits to the audited consolidated financial statements for further information.
Prior to the PBGC termination of the U.S. pension plans, the Predecessor sponsored pension plans covering employees in the U.S., which generally
provided benefits of stated amounts for each year of service, as well as supplemental benefits for employees who qualified for retirement before normal
retirement age. Certain employees also participated in non-qualified pension plans covering executives, which are based on targeted wage replacement
percentages and are unfunded. The Predecessor froze the salaried plan, the SERP, the ASEC Manufacturing Retirement Program, the Delphi Mechatronics
Retirement Program and the PHI Non-Bargaining Retirement Plan (collectively, the "Pension Plans") effective September 30, 2008. Additionally, the
Predecessor reached agreement with its labor unions resulting in a freeze of traditional benefit accruals under the Delphi hourly-rate employees pension plan
effective as of November 30, 2008.
The PBGC terminated the Pension Plans on July 31, 2009. Accordingly, the Predecessor recognized a pension curtailment and settlement loss of $2.8
billion included in reorganization items in the consolidated statements of operations for the three and nine month periods ended September 30, 2009. This loss
included the reversal of $5.2 billion of liabilities subject to compromise related to the Pension Plans offset by the recognition of $5.0 billion of related
unamortized losses previously recorded in accumulated other comprehensive income and the recognition of a $3.0 billion allowed general unsecured non-
priority claim granted to the PBGC.
On February 4, 2009, the Predecessor filed a motion with the United States Bankruptcy Court for the Southern District of New York (the "Court")
seeking the authority to cease providing retiree OPEB benefits in retirement to salaried employees, retirees, and surviving spouses after March 31, 2009. On
February 24, 2009, the Court provisionally approved the Predecessor's motion to terminate such benefits effective March 31, 2009 based on the Court's
finding that the Predecessor had met its evidentiary burdens, subject to the appointment of a retirees' committee (the "Retirees' Committee") to review whether
it believes that any of the affected programs involved vested benefits (as opposed to "at will" or discretionary, unvested benefits). On March 11, 2009, the
Court issued a final order approving the Predecessor's motion to terminate salaried OPEB benefits. The Court approved a settlement agreement (the
"Settlement"), between the Predecessor and the Retirees' Committee and the Delphi Salaried Retirees' Association (the "Association") settling any and all
rights for the parties to appeal the Court's March 11, 2009 final order authorizing the Predecessor to terminate salaried OPEB benefits. Pursuant to the
Settlement, the Predecessor agreed to provide the Retirees' Committee with consideration of $9 million to resolve pending litigation. The Predecessor
recognized a salaried OPEB curtailment and settlement gain of $1,168 million included in reorganization items in the consolidated statement of operations for
the period from January 1 to October 6, 2009. This settlement gain reflects the reversal of existing liabilities of $1,173 million ($1,181 million net of $8
million to pay salaried OPEB claims incurred but not reported as of March 31, 2009) and the recognition of previously unamortized net gains included in
accumulated other comprehensive income of $4 million. The reorganization gain also reflects the impact of the $9 million consideration to be provided for the
Settlement described above.
Refer to Note 13. Pension Benefits to the audited consolidated financial statements included herein for further information on (1) historical benefit costs
of the pension plans, (2) the principal assumptions used to determine the pension benefit expense and the actuarial value of the projected benefit obligation for
the U.S. and non-U.S. pension plans, (3) a sensitivity analysis of potential changes to pension obligations and expense that would result from changes in key
assumptions and (4) funding obligations.
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