Washington —A group of Congress members asked U.S. Secretary Thomas Perez to intervene and require the government’s pension insurer to quickly make determinations on the value of pensions for 20,000 Delphi Corp. salaried retirees.
U.S. Sen. Sherrod Brown, D-Ohio; Debbie Stabenow, D-Lansing; Charles Schumer, D-New York; and Bob Casey, D-Pennsylvania, along with Ohio U.S. Reps. Marcia Fudge, Marcy Kaptur and Tim Ryan asked Perez to ensure the Pension Benefit Guarantee Corporation makes a final determination by the end of the year. The members said without action, PBGC might not complete the analysis until 2016.
“The 20,000 members of the salaried plan have been waiting for almost five years for a final benefit determination from the Pension Benefit Guarantee Corporation,” the lawmakers wrote. “Recent comments from the PBGC have suggested that the agency has yet to take basic initial steps towards making such a determination. This delay is unsatisfactory and deeply troubling — contradicting the PBGC’s policy to reach a final determination within three years of a plan’s termination.”
The senators want monthly updates on the government’s pension insurer toward meeting its goals.
A Labor Department spokesman, Michael Trupo, confirmed the department received the letter but declined to comment further.
Last month, Delphi salaried retirees won a legal battle in their nearly five-year battle over the PBGC’s decision to assume the bankrupt auto supplier’s pensions.
U.S. District Judge Emmet Sullivan in Washington in June ordered the Treasury Department to turn over documents shedding any light on the role of President Barack Obama’s auto task force in 2009 in the decision of auto supplier Delphi to terminate pension plans of its salaried workers. Sullivan also said Treasury must explore whether it can compel two former members of the auto task force, Matthew Feldman and Harry Wilson, to answer questions about their role in Delphi’s financial issues.
Delphi pension retirees from the Troy-based parts unit that was spun off by General Motors in 1999 have been battling for more than 4½ years over lost pension benefits. They have spent millions in legal fees just trying to get access to the documents.
Despite hearings in Congress and calls by members of Congress to negotiate a settlement, Delphi retirees have had no success in convincing GM or Delphi to reconsider the pension cuts.
Lawyers for Delphi recipients have been fighting to get additional documents from the PBGC.
One of the key issues is how much were liabilities of the salaried pension plan before they were terminated. Delphi retirees cite a 2009 independent actuary that said the liabilities were $3.5 billion, while the PBGC said it was $5.2 billion. The retirees want the documents to try to understand how the PBGC arrived at the higher calculation.
Some 20,000 salaried retirees and future retirees at Delphi lost pensions and health and life insurance benefits.
Delphi, while in bankruptcy in 2009, terminated the pension plans of 70,000 people and left a $7.2 billion shortfall. The PBGC assumed the plans and must pay $6 billion of the losses.
PBGC recovered about $650 million from Delphi, meaning its net losses from taking over the pension plans are about $5.3 billion
The supplier’s pension termination is the second-largest loss to PBGC in its history, behind only United Airlines’ pension shortfall of $7.4 billion in 2005.
Some retirees will lose up to 65 percent of benefits. Salaried retirees are expected to lose an estimated $400 million, PBGC has said.
The federal government allowed GM to use nearly $3 billion of taxpayer funds to help Delphi exit from bankruptcy and let GM reacquire part of its former parts unit, which it has since resold.
U.S. District Judge Arthur Tarnow in September 2011 dismissed claims brought by Delphi retirees against the Treasury Department, Secretary Timothy Geithner, the auto task force and former auto advisers Steven Rattner and Ron Bloom.