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Visteon to Keep Pension Plans

Contrary to what it initially planned to do, American supplier Visteon announced today it will keep the pension plans for the 23,000 employees and retirees. This means the decision made in December, when Visteon said it wants to transfer three of its pension plans to the Pension Benefit Guaranty Corporation (PBGC).

The move would have shaved an aggregate shortfall of $544 million for Visteon, while the retirees would have lost $100 million in benefits because of federal limits.

Now, Visteon says the decision to retains the plans reflects "the company's improved operating and financial performance, as well as recovering industry and market conditions."

"Visteon's decision to keep its pension plans is a victory for its workers and retirees," PBGC Acting Director Vince Snowbarger told DetNews.

"We will continue our efforts to make sure that a reorganized Visteon emerges financially sound and with its defined benefit pension plans intact."

The move is part of Visteon's revised reorganization plan, submitted to the Bankruptcy Court in Wilmington, Delaware, a plan which has the support of some 74 percent of holders of secured claim.

According to the new plan, the term lenders will receive 85 percent of the new common stock, holders of 12.25 percent senior notes will receive 6 percent, while holders of other unsecured notes and non-trade claims will get 9 percent. As for trade creditors, they will receive cash, amounting to about half the value of their claims.
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About the author: Daniel Patrascu
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Daniel loves writing (or so he claims), and he uses this skill to offer readers a "behind the scenes" look at the automotive industry. He also enjoys talking about space exploration and robots, because in his view the only way forward for humanity is away from this planet, in metal bodies.
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