Lawmakers push for Delphi answers
Washington — – More than a dozen Ohio Republicans in Congress want the government’s pension insurer to answer more questions about its handling of claims by Delphi retirees, while the retirees won a round in their 5-year-old court battle.
House Speaker John Boehner, Sen. Rob Portman and 11 House Republicans from Ohio this week wrote the Pension Benefit Guaranty Corp., asking the agency to answer a new round of questions about the decision to absorb the pensions of more than 20,000 Delphi salaried retirees.
At issue is the agency’s time frame for determining the final benefits for the retirees. The pensions — which were abandoned by Delphi in 2009 and turned over the government’s pension insurer — are insured only to maximums allowed by age.
“The PBGC has a stated policy of issuing these determinations in three years; however, these retirees have waited in earnest for over five years for the PBGC to complete the basic documentation necessary to begin the benefit determination process,” Rep. Mike Turner, R-Ohio, said.
Retirees from the Troy-based parts unit that was spun off by General Motors Co. in 1999 have been battling since September 2009 over lost pension benefits. They have spent millions in legal fees trying to get access to the documents. Delphi exited bankruptcy as a new company based in the United Kingdom.
One of the issues is the amount of 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 they were $5.2 billion. 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 up to 65 percent of the value of their pensions, along with 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 loss from taking over the pension plans is $5.3 billion.
“While I appreciate the PBGC’s response to the request that the Ohio Republican delegation made back in June on the extreme delay in the final benefit determinations for the Delphi salaried employees, let me just say we have even more questions now than we had before our request,” Boehner said. “We will, without a doubt, continue pressing the PBGC until we get the answers that these salaried retirees deserve.”
The retirees separately filed suit against PBGC over the decision to terminate the pension. The suit is still awaiting trial. This week, the retirees won a court battle when a three-judge panel of the U.S. Appeals Court rejected a bid by the PBGC to block a lower court ruling requiring PBGC to turn over some documents to the retirees.
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.
In a move that has brought harsh criticism from some in Congress, GM “topped up” the pensions of most union Delphi hourly workers and retirees, primarily those from the United Auto Workers union, but didn’t do the same for salaried retirees. It took the action even though it wasn’t legally obligated to do so.
GM told a government audit released in December 2011 it made the decisions because of its dependence on the UAW. The automaker didn’t agree to top up the pensions of smaller unions.