Pensions restored for hourly retirees

By Don Shilling

GM will cover the payments being cut by a federal agency.

Hourly retirees of Delphi Packard Electric will have their pensions restored under a court order.

“This is huge,” said Bob Sutton of Austintown, a staff representative with the International Union of Electrical Workers.

Many of the thousands of area Delphi retirees have been on edge since General Motors agreed Sept. 1 to make payments to restore the pensions. They had faced pension cuts of up to two-thirds unless a judge approved the deal.

Lauren Asplen, a spokeswoman for the International Union of Electrical Workers, said various legal issues had to be worked out before the deal between GM and Delphi Corp., a supplier that it used to own, was finalized.

On Thursday, with those details resolved, Judge Robert Gerber in New York approved the deal. He is overseeing the bankruptcy case of the “old GM,” which includes the parts of the automaker that were left behind when it emerged from bankruptcy protection.

“This is what we told the retirees was going to happen, but now it is signed, sealed and delivered,” Asplen said.

The deal, however, does not cover Delphi’s salaried retirees, who stand to have their pensions reduced by 30 percent to 70 percent as they are taken over by the federal Pension Benefit Guaranty Corp. Salaried retirees are trying to exert political influence to find a way to have their pensions restored.

The PBGC protects the pensions of nearly 44 million American workers and retirees in more than 29,000 private single-employer and multiemployer defined benefit pension plans, according to its Web site.

Workers were having pensions reduced because the PBGC doesn’t cover early-retirement supplements offered by Delphi. These were to be paid until workers were eligible for Social Security payments.

GM has agreed to “top up” the pensions of the hourly workers to cover the supplements. The deal was approved by the U.S. Treasury, which lent money to GM to help it survive.

In addition, GM reduced health-care coverage for retirees. The coverage for Delphi retirees reverted to GM when Delphi filed for bankruptcy.

The deal approved by the judge awards the IUE a $1 billion claim in GM’s bankruptcy case for medical expenses for IUE retirees who are older than 65. It isn’t known how much of the claim will be paid at the end of the bankruptcy case.

Sutton said any money that is received would be used to pay for Medicare supplements for these retirees.

The deal also provides an additional $50 million for health care for retirees who are younger than 65. The deal creates an insurance plan for these workers, but it carries higher deductibles and premium co-payments than what the workers previously had.

The IUE wrote a letter to U.S. Rep. Tim Ryan of Niles, D-17th, thanking him for working with GM and government officials to make the deal happen.

“I can unequivocally state that your efforts were critical,” wrote James Clark, IUE president.

shilling@vindy.com