Delphi SRSP and PSP Plans  
 

Delphi Plan Review as of March 1, 2010

Introduction
With close to 40 investment options available, the Salaried Retirement Savings Program (SRSP) for salaried employees and Personal Savings Plan (PSP) for hourly employees are among the best in the country. With this large number of funds, there is ample opportunity to build a well-diversified portfolio for your 401(k) savings.

In this page of the website we include some “Featured Funds” within the Delphi 401(k) plans. At the bottom of this page, we provide a table containing many of the funds available within the SRSP and PSP plans with critical data on each fund including style, risk, and past performance. Throughout this page we provide other pertinent information concerning the plan and links to other areas of our website that may be of interest.

Check this page for future updates to the SRSP and PSP plans as well as news that affects Delphi Corporation.

Delphi Reinstates Company Match - March 1, 2010
Delphi has announced the reinstatement of the 3.5% Company Match in the Salaried Retirement Savings Plan (SRSP). Effective March 1, 2010, Delphi will contribute an additional amount equal to $.50 for every dollar of your savings up to 7.0% (e.g. 3.5%) of your eligible compensation that you contribute into the SRSP. This Company Match will be over and above the 4.0% automatic contribution that you are currently receiving into your SRSP.

While your personal retirement plan may already call for a contribution level higher than 7.0%, all participants should contribute a minimum of 7.0% to the SRSP to maximize the company contribution to their account.

Delphi and the PBGC - November 2009
August 10, 2009 the Pension Benefit Guaranty Corporation (PBGC) assumed responsibility for the pension plans of 70,000 workers and retirees of Delphi Corporation. Delphi sponsors six defined benefit plans for its workers, including the Delphi Salaried Retirement Savings Program (SRSP) and the Delphi hourly Personal Savings Plan (PSP). All six plans have been assumed by the PBGC.

Although many current pension recipients will eventually see a change in their pension payment, it could take the PBGC several months before determining an estimated pension benefit for Delphi pension recipients. During the time that the PBGC is working to determine the estimated pension payment, recipients will continue to receive the same pension payment they had been receiving prior to the PBGC takeover. Once the estimate is determined, it could then take another several years before the PBGC fully reviews the plan and finally determines all benefit amounts. Any overpayments or shortfalls created by the estimated payments recipients received over this timeframe will be made up by adjusting the final payment to be received from the PBGC.

Delphi Salaried Retirement Savings Program (SRSP)
Delphi has made changes to the retirement plans that have increased the importance of the 401(k) plan and individual savings for an employee’s retirement. The changes, coinciding with the freeze of the traditional pension, include renaming the salaried 401(k) plan, a company contribution based on salary, and a company matching contribution.

Delphi’s Savings Stock Purchase Program (SSPP) has been renamed the Salaried Retirement Savings Program (SRSP) to better emphasize the primary purpose of the plan; to help employees save for retirement. The SRSP includes a company contribution equal to 4% of eligible salary. Additionally, Delphi will match $0.50 on each $1.00 of employee payroll contributions up to 7% of eligible salary for those employees with less than 25 years of service and up to 9% of eligible salary for those employees with more than 25 years of service.

As you consider how much you should contribute to the plan, it is very important that you understand how to stay within the annual IRS limits for contributions to the plan. Mainstay Capital Management can help you avoid missing out on valuable employer contributions by showing you how much you can safely contribute.

Request a free copy of Mainstay Capital Management's "Guide to Investing in the Delphi SRSP"

Pyramis Active Lifecycle Funds
The Pyramis Active Lifecycle fund family (Pathway One) is designed for those participants who wish to base their asset allocation decision on a specific target date, typically aligning the account with the fund that most closely matches their projected retirement date.

Eleven of these funds are included in the new plan, with 5-year incremental targets from 2000 to 2050. The way the Pyramis Active Lifecycle Funds are designed, the further away the target date, the more aggressive the asset allocation, conversely, the closer the date, the greater the emphasis on preservation of capital in the asset allocation.

Lifecycle funds hold some appeal in that they are simple to explain and administer. While this approach is unique, we believe the asset allocation decisions provided by these funds are crude at best. Lifecycle funds attempt to make decisions about asset allocation based solely on a target date. An investor’s tolerance for risk and financial goals are other key factors that should largely play a roll in determining investment strategy and asset allocation. Additionally, they leave no room for the fund manager to tactically adjust the strategy based on specific opportunities within the financial markets or in response to prevailing market conditions.

The returns realized in these commingled vehicles are diluted by a rigid adherence to mechanical allocation parameters. These parameters may prove to be shortsighted and inappropriate for everyone participating in the pool. The real world changes every day, yet proponents of lifecycle funds expect someone to stick to a single game plan for as much as 40 years, whether interest rates are rising or falling, or whether the economy is in expansion or recession. While lifecycle funds offer a simple one-stop-solution, we continue to advise participants to avoid lifecycle funds and retain the flexibility to proactively adjust their portfolios as needed.

Please reference "Target-Date Funds Face Regulation", published in The Wall Street Journal.

A Note on Institutional Funds
One theme in the new SRSP and PSP is the use of institutional funds in place of retail mutual funds. Here the plan architects are moving to investment options with lower internal operating expenses. (Institutional funds do not have the marketing costs associated with retail mutual funds that are ultimately passed along to the shareholders in the form of fund management expenses.) The problem with institutional funds, however, is the lack of publicly available information about the funds that is so readily available for retail mutual funds through the fund family’s website or other data retrieval services. This was one of the drawbacks of the Promark funds as investment options in the SRSP and PSP. As with the Promark funds, because of the lack of publicly available information, the institutional funds within the plan are not detailed in our Fund Tables.

Fund Table
The Delphi SRSP and PSP fund table provides critical data on investment options within the plan.

  Delphi SRSP and PSP - Fund Table                                                                          

If you have any questions concerning our website or your Delphi 401(k) account, please feel free to contact us using the following email link: Mainstay@mainstaycapital.com or call us toll-free at 1-866-444-6246.

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