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A victory for workers and retirees

In December 2009, Visteon Corp. announced that it was going to terminate its pension plans, which cover some 21,000 workers and retirees, as part of the company's overall bankruptcy and reorganization effort.  Visteon planned to dump its pension obligations onto the Pension Benefit Guaranty Corporation (PBGC), the government agency that insures private "defined benefit" pension plans. Because the PBGC has limits on the amount of benefits that it will pay out, thousands of workers and retirees would have faced possible benefit cuts if Visteon had terminated its pension plans.  Instead of accepting their fate, Visteon's workers and retirees banded together to fight the pension plan termination. They created the Visteon Pension Plan Participant Ad Hoc Committee to pressure the company not to terminate its plan, and they hired a law firm with bankruptcy expertise.  During all bankruptcy proceedings, a committee of unsecured creditors is set up to represent the parties who are owed money by the company but who are lower priority than secured creditors. Unsecured creditors include people who are owed money by a company, but typically pension plan participants are not represented. In a precedent-setting legal victory, the Ad Hoc Committee won the right to have three representatives on the unsecured creditors committee to look out for the interests of the workers and retirees in the pension plan. In March Visteon announced that it would reverse course by retaining its pension plan during its reorganization. Vince Snowbarger, acting director of the PBGC, said, "Visteon's decision to keep its pension plans is a victory for its workers and retirees."  A representative of the Ad Hoc Committee told the Pension Rights Center that he was "pleased we could help change the direction the company is going and we're cautiously optimistic." But he urged other workers and retirees to stay active until the plan is accepted by the courts and the bankruptcy process is concluded. Congratulations to Visteon pension plan participants for standing up for your rights and making your voices heard! For additional information about pension plan terminations, see our fact sheet explaining what might happen if your pension plan terminates. Read about some of the other strategies workers and retirees have used to protect their pension rights.


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