Delphi Pension Restoration Bill is Reintroduced

A bipartisan group of U.S. representatives has reintroduced legislation to restore the pensions of more than 20,000 retirees of former General Motors unit Delphi. The bill aims to provide back pay for pension payments to retirees of the auto-parts maker, which was created as a spin-off of GM in 1999 but filed for bankruptcy protection in 2005.

The proposed legislation is backed by Representatives Dan Kildee, D-Michigan, Mike Turner, R-Ohio, Claudia Tenney, R-New York, and Gwen Moore, D-Wisconsin. The states with the most Delphi retirees are Michigan, Ohio, Indiana and New York.

The bill’s supporters say the back pay will cover pension payments the retirees should have been receiving for the past 13 years via a lump-sum payment equal to the difference between the benefits that have been paid out and what retirees would have been paid without limitation—plus 6% interest. The bill would also restore full pension payments going forward.

In 2008, GM assumed responsibility for some of the Delphi hourly pension plan and was expected to take back the entire plan. However, during the financial crisis of 2009, GM filed for bankruptcy and said it could not afford to take on Delphi’s pensions.

A group of 21,000 Delphi salaried employees who worked at the company’s Dayton, Ohio, plant had been covered by a single-employer pension; however, GM closed the plant and voluntarily terminated the fully funded pension of the salaried employees. Later that year, the Pension Benefit Guaranty Corporation assumed responsibility for Delphi’s six pension plans that, at the time, covered 70,000 workers and retirees, while the group of 21,000 Dayton workers formed the Delphi Salaried Retirees Association.

Last year, Kildee introduced the Susan Muffley Act, which passed in the House but never came before a full vote in the Senate after Republicans voted against a request for unanimous consent, which could have fast-tracked the bill. It is named after a deceased member of the Delphi Salaried Retirees Association, Susan Muffley, who was married to a Delphi retiree.

“Delphi salaried retirees lost their pensions through no fault of their own, and that’s not right,” Kildee said in a statement. “These hardworking retirees have waited for over a decade for the benefits they earned. We will not stop fighting for Delphi salaried retirees until their pensions are restored.” 

Bruce Gump, chairman of the retirees’ association, lauded the bill but noted that the plans’ retirees who passed away since 2009 never received their full benefits.

“In nearly 14 years, we have lost many of them,” Gump said in a statement. “They did not live to see the full pensions they earned. Their surviving spouses and families continue to suffer the effects of the loss of up to 70% of earned and promised pensions.”

He added that “some have called the effort a ‘bailout,’ but the retirees are only asking the Federal government to restore their pensions.”