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Judge to PBGC: Set aside funds for Delphi retiree pensions
TweetThe judge did not, however, accept retirees’ request that benefit cuts be stopped now.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
YOUNGSTOWN — A judge said a federal pension agency must set money aside as it cuts Delphi Corp. salaries’ pensions just in case it loses a lawsuit the retirees filed.
U.S. District Judge Arthur Tarnow of federal court in Detroit said Tuesday the Pension Benefit Guaranty Corp. can either put money in escrow or stipulate that it will make the retirees whole if the benefit reductions are reversed.
Judge Tarnow issued the ruling after a Dec. 22 hearing, in which the Delphi Salaried Retirees Association argued for an injunction that would stop the cuts. The judge said he would deny the injunction if the PBGC uses one of the methods to ensure that retirees can recover money lost in pension cuts, which are to start in February.
Jeffrey Speicher, a PBGC spokesman, said the agency is reviewing the ruling and will file a response.
Bruce Gump of Howland, chairman of the Warren Legislative Group of the retirees association, welcomed the judge’s ruling.
The decision is important because federal law doesn’t provide any way for retirees to recover money lost in pension cuts if those cuts are found to be invalid later on, Gump said. The ruling would allow the retirees to make that recovery.
It also indicates that Judge Tarnow thinks enough of the lawsuit that he wants to give the retirees an option for recovering the money, Gump added.
The lawsuit claims the PBGC improperly gave up liens that it held on Delphi’s operations when it accepted the auto supplier’s underfunded pension accounts. No hearings on the lawsuit have taken place.
The retirees have been saying they will be taking cuts of between 30 percent and 70 percent when the pensions shift to the PBGC. Cuts are coming because of the agency’s benefit limits.
Much of the cuts are the result of the PBGC not paying early-retirement supplements that Delphi issued until retirees were eligible for Social Security.
Gump said about 500 salaried retirees throughout the nation have received letters their pensions will be reduced starting in February. Those contacted by the association have reported an average reduction of 25 percent and a range of between zero and 67 percent.
He said people who have not yet been notified are likely to have larger reductions because they are younger.
About 3,000 people are to receive letters this week, notifying them of cuts to take effect in March, he said.
Overall, there are about 15,000 salaried retirees, including between 1,200 and 1,500 in the Mahoning Valley.
The retirees also have been trying to gain political support in Columbus and Washington, D.C., to have their pensions restored. They say the cuts are unfair because union retirees are having their pensions restored by General Motors, with approval from the U.S. Treasury Department.
State Sen. Capri Cafaro of Liberty, D-32nd, and state Sen. Joe Schiavoni of Canfield, D-33rd, testified Tuesday in Columbus on behalf of a resolution that calls for the federal government to treat union and nonunion retirees fairly.
shilling@vindy.com
Comments
Quick question what makes Delphi employees think they are so special. The PBGC is set up this way if you are not at a certain age or have over thirty years employed you take the cut. Read the by-laws of the PBGC, or ask any steelworker whose company went bankrupt.
The judge's decision gives support to the fact that the retirees have been wronged. It is good to also have the support of the UAW leadership. The UAW's insight into this matter is a reflection of the basic issue of right and wrong in how the GM and US Government have discriminated against the Salaried retirees. This injustice has gone on long enough. It will no doubt cause the defeat of incumbent politicians who have been ineffective in representing their constituents. It will cause thousands to boycott GM products, further tarnishing GM's image as an unethical corporation in America. We urge citizens to support the reversal of this travesty by exerting your voice, both in NON GM showrooms and in the voting booth.
If our elected politicians cannot reverse this blatant discrimination by our own government, we urge everyone to vote against them in their reelection bids. This would include Tim Ryan, Ted Strickland, Charlie Wilson, and Sherrod Brown. Tell everyone you know that justice must be done.
hey rdl50 I am a union delphi retiree, according to section 1114 of the bankruptcy laws, it says that all parties must be treated equally. Explain to me how an employee with less years credit service than I have with GM and they can have full pension and health care while I have my pension turned over to the PGBC and have to pay for my health care. I had 29 years credit years service with GM and know of several people who only had 28 yrs and are not being touched one bit. TALK ABOUT DISCRIMINATION>>>>>>>>>>>>>
hey rdl50 I am a union delphi retiree, according to section 1114 of the bankruptcy laws, it says that all parties must be treated equally. Explain to me how an employee with less years credit service than I do with GM and they can have full pension and health care while I have my pension turned over to the PGBC and have to pay for my health care. I had 29 years credit years service with GM and know of several people who only had 28 yrs and are not being touched one bit. TALK ABOUT DISCRIMINATION>>>>>>>>>>>>>