Washington -- The Pension Benefit Guaranty Corporation said today it will assume responsibility for the pension plans of 70,000 workers and retirees of Delphi Corp. -- a takeover that will cost the government's insurer of pensions about $6.25 billion.

The government takeover of both Delphi's hourly and salaried pension plans could take months. The Troy-based auto supplier said it won't cancel its hourly pension plan until it gets court permission so that it doesn't violate its union workers collective bargaining rights.

PBGC said it "is stepping in to protect the Delphi pensions because the restructuring Delphi cannot afford to maintain its pension plans, and General Motors has stated it will not assume them."

Delphi had previously announced it would cancel its salaried pension plan as it struggles to emerge from bankruptcy.

Delphi said it can't terminate its hourly pension plan without a court order, saying it "does not believe that a termination by the PBGC of the U.S. hourly pension plan would violate Delphi's existing collective bargaining agreements or prior Bankruptcy Court orders."

But Delphi "has not agreed to a termination of the plan and will not enter into an agreement with the PBGC to take over the plan unless the Bankruptcy Court finds that doing so is not a violation of Delphi's collective bargaining agreements or a federal district court issues an order terminating the U.S. hourly plan."

As part of the deal, the PBGC will receive a $3 billion allowed general unsecured claim against Delphi's assets. PBGC spokesman Jeffrey Speicher said, "Accounting rules require us to book losses before they come in. Bankrupt since 2005, Delphi has been on our books for a while. The $3.5 billion represents the increase over the amount recognized in our FY 2008 numbers of last September."

Delphi's Hourly Pension Plan covers 47,000 participants and has about $3.7 billion in assets and more than $8 billion in liabilities, according to PBGC estimates. The PBGC expects to be responsible for about $4 billion of the plan's shortfall of nearly $4.4 billion. The Delphi Salaried Pension Plan covers about 20,000 workers and retirees, and has $2.4 billion in assets and liabilities of $5 billion, according to PBGC estimates.

The PBGC expects to be responsible for about $2.2 billion of its estimated $2.6 billion in underfunding.

The PBGC said after receiving funds from both GM and Delphi, it expected the takeover to cost it about $6.25 billion.

In addition, the agency will be responsible for $50 million in underfunding of four smaller Delphi plans with 2,000 participants. These plans are the ASEC Manufacturing Retirement Program, Delphi Mechatronic Systems Retirement Program, Packard-Hughes Interconnect Bargaining Retirement Plan and Packard-Hughes Interconnect Non-Bargaining Retirement Plan.

Delphi was spun off from GM in 1999. Since Delphi entered bankruptcy protection in 2005, the PBGC has worked intensively with Delphi, GM and other stakeholders to keep the pension plans ongoing.

In September 2008, GM took on about $2.5 billion in liabilities of the Delphi Hourly Plan, and until its recent restructuring in bankruptcy, GM had been expected to assume the entire obligation for the hourly plan.

The PBGC will pay pension benefits up to the limits set by law -- but in some cases, especially for younger retirees, they will get far less. The PBGC does not insure pension benefits above the legal limits, health benefits or other types of employee benefits.

PBGC currently guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in over 29,000 private-sector defined benefit pension plans.

GM issued a statement late Tuesday, saying that "as a result of bargaining at the time of the spin-off, General Motors Corporation did agree to top-up pension benefits for certain limited groups of hourly employees and retirees in the event that the Delphi hourly pension plan was terminated." As a result, General Motors Co. and PBGC have reached a preliminary deal. GM will give the PBGC $70 million, as well as a portion of future distributions to GM from the new company that acquires Delphi assets upon resolution of its bankruptcy."

GM expects to receive such distributions in return for capital contribution to the new company. Details will be communicated after the Delphi bankruptcy agreement is finalized.

"This is a very difficult situation, and we understand the personal sacrifices that Delphi employees, retirees, and many others, including GM employees and retirees, have made and continue to make during this industry-wide crisis," GM said.