After 10 months of fighting Delphi Corp. for turning over its hourly and salaried pensions to the Pension Benefit Guaranty Corp. to escape a four-year bankruptcy, the 15,000-member Delphi Salaried Retirees Association heard good news Wednesday.
Congress isn’t happy about the situation and wants it to be fixed.
Rep. Tim Ryan, D-Ohio, said turning pensions over to PBGC — covering more than 70,000 people and giving the government-owned agency a $6.7-billion deficit — is “unacceptable and needs to be fixed.”
The transaction was first reported to cost $6.25 billion. But according to the Government Accountability Office, the cost is now more like $6.7 billion — the second-largest PBGC takeover in history.
This year, PBGC has acquired pensions from at least five other auto suppliers and is currently saddled with a $21.1 billion deficit.
On Oct. 6, the Troy, Mich.-based auto supplier exited bankruptcy. A huge part of its emergence was ridding itself of its pensions.
However, under the United Auto Workers contract, when Delphi’s former parent, General Motors Co., decided to it spin off its largest supplier in 1999, an agreement was reached that GM would “top off” hourly retirees’ pensions.
Yet, no such agreement was made with Delphi salaried retirees. DSRA members have no benefits with their former employer, and Delphi has eliminated health and life insurance for 15,000 Delphi salaried retirees and their families.
Furthermore, with pensions going to PBGC, some younger Delphi retirees may have more than 70 percent of their pension and benefits cut.
“I am in a wait-and-see mode,” said Pat Crittendon, a retired Kokomo Delphi employee. “I try not to get my hopes up to high. Who knows what will happen.”
Wednesday, two members of the DSRA, four members of Congress and a pension spokesperson appeared before the Health Education Labor and Pension subcommittee to complain about the treatment from Delphi.
Last month, DSRA appeared before the HELP subcommittee along with other organizations discussing pension reductions. But Wednesday, the total focus was on DSRA.
Now, the focus remains on how privately held Delphi Holdings LLP disposed itself of pensions and what can be done to fix the situation.
“I am very encouraged by all of this,” said Paul Dobosz, who worked for Delphi/GM for 37 years and spent his last 11 years in Kokomo until he retired in December 2008. “It makes you feel good that Congress is extremely interested in our situation. They realize something was not done right. They want to modify and fix it. There has been a lack of transparency with the pensions between hourly and salaried workers. But we are very encouraged about the hearing and what we heard from the committee.
“They are very interested in hearing our story and the problems we are facing.”
After 10 months of fighting his former employer, Den Black, the DSRA’s interim chair, said the response they received Wednesday made for “a very good day.”
“We are going to follow up with the people and get a full disclosure from the U.S. Treasury on what happened with our pensions,” continued Black. He added his group also has a lawsuit filed in U.S. District Court in Detroit against PBGC to protect and restore the pensions. Additionally, several senators have asked the U.S. Treasury to turn over all documents related to General Motors’ and Delphi’s bankruptcies as well as explaining who authorized PBGC to give up its Delphi liens.
“We have several people willing to look into that, but so far the requests have been ignored,” Black said. “But this is a group that wants to find out what happened and it is clear to us the U.S. Treasury does not want the information to be disclosed.”
• K.O. Jackson is the Kokomo Tribune’s business writer. He can be reached at 765- 854-6739 or via e-mail kirven.jackson@kokomotribune.com
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