U.S. House to vote next week on bill to restore lost pension benefits for Delphi workers

Melissa Nann Burke
The Detroit News

Washington — The U.S. House is expected to vote next week on a bill intended to restore lost pension benefits for thousands of former Delphi Corp. salaried workers, including about 6,000 in Michigan. 

U.S. Rep. Dan Kildee, D-Flint Township, who is leading the legislation in the House, said lawmakers could take up the bill and pass it Wednesday. The House Rules Committee is set to consider the measure when it meets Friday.

"It’s legislation that has bipartisan support, so I feel pretty good about where we are right now," Kildee said in a Thursday interview. 

U.S. Rep. Dan Kildee, D-Flint Township

"If we get this through to the president's desk, it ends a 13-year nightmare for people who have lost a lot. As important as the legislation is, it can't erase the harm that's been done to these families for those 13 years. But we can do what we can. It's never too late to do the right thing."

The Congressional Budget Office has not yet formally scored the bill, but preliminary estimates put the cost at $900 million, Kildee said. 

Kildee said the legislation would be fully paid for by moving up the adjustable interest rate payment date that employers make, which would produce a surplus within the Pension Benefit Guaranty Corp., the government-owned pension insurer. 

"In other words, it's paid entirely within the PBGC through an adjustment in their premium schedule, which raises over a billion dollars, which is more than what is necessary to pay for this fix," Kildee told The Detroit News. "And, of course, it's appropriate that it'd be paid for out of the PBGC premiums because this is a PBGC issue."

The legislation itself would set up a trust fund at the U.S. Department of Treasury that would be used to top off the benefits of the non-union retirees of the former General Motors Corp. parts unit to make them whole.

The legislation is co-sponsored by Ohio Reps. Michael Turner, a Republican, and Tim Ryan, a Democrat. Ohio Sen. Sherrod Brown, a Democrat, introduced companion legislation in the Senate, along with Michigan Democratic Sens. Debbie Stabenow and Gary Peters and Republican Sen. Rob Portman of Ohio. 

The House vote comes about six months after the U.S. Supreme Court declined to hear the retirees' case in January, letting stand a ruling by the 6th Circuit U.S. Court of Appeals upholding the government termination of their pension plans.

After that decision, lawmakers said it became clear a legislative solution was the only option remaining to help the Delphi workers. 

"Obviously, I'm really happy that we're to this point now. What it means is justice for people who have experienced an injustice for far too long," Kildee said.

The Delphi retirees' lawsuit dated to 2009. As GM went through a quick-exit bankruptcy in 2009, the decision was made to "top up" the pensions of most union Delphi hourly workers and retirees, largely those of the United Auto Workers, to the full amount promised by GM. 

GM did not do the same for 20,000 salaried retirees and pension participants at Delphi, a former GM subsidiary that was spun off in 1999 and which filed for bankruptcy in 2005. GM later told a 2011 government audit that it made the call "because of its dependence" on the United Auto Workers union. 

The Pension Benefit Guaranty Corp. then terminated the Delphi salaried workers' plan and has since been paying retirement benefits to the former plan participants out of its insurance funds.

But some pensioners and other plan participants lost as much as 70% of their vested benefits. About 20,000 workers were affected by the cuts, including close to 6,000 in Michigan.

The legislation aims to provide what the PBGC has not by paying the difference between the statutory cap and what the retirees' benefits would have been.

Beneficiaries who already are receiving benefits would receive a lump sum payment of the difference between what was paid by PGBC and would have been paid without the statutory limitations, plus 6% interest, according to a bill summary.

The PBGC said last year in court records that the agency has paid nearly $1.5 billion in benefits out of its insurance funds since 2009 that were unfunded in the Delphi plan.

The bill is named after Susan Muffley of Indiana, whose husband, David, was an electronics technician for three decades whose pension was cut in 2009, according to Kildee's office.

She avoided seeing her doctor due to financial concerns, despite health issues, and was later diagnosed with pancreatic cancer and died in 2012.

At least eight other bills have previously been introduced in Congress related to the Delphi salaried employees but prior to the conclusion of the litigation.