VAN BUREN TOWNSHIP, Mich. (AP) — Visteon Corp. said Wednesday that it will offer the option of one-time lump sum payments in lieu of traditional pension benefits to some former workers who are vested in its pension plan, but not currently receiving monthly payments.
The Van Buren Township, Mich.-based auto supplier said that at current interest rate levels, the lump sum settlements will give it a chance to significantly cut its liabilities and administrative costs.
The one-time payments will be funded with pension plan assets and offered from Oct. 1 to Nov. 9 to nearly 10,000 of Visteon's 20,000 total U.S. plan participants. The workers will have a choice between taking a lump-sum payment or receiving traditional retirement benefits that are paid out over a period of years.
The company did not say how much the payments would be or how much it expected the move to cost.
Visteon said it expects to take a one-time, non-cash year-end profit-and-loss charge as a result of the move. The total charge will depend upon how many employees opt to take a lump-sum payment, the value of assets involved and discount rate at the end of the year, Visteon said.
Visteon was spun off from Ford Motor Co. in 2000. It filed for bankruptcy protection in 2009 and emerged in 2010 after shedding billions in debt and pension costs.
Visteon shares rose $1.33, or 2.9 percent, to $47.11 in morning trading.