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Delphi salaried retirees get pension appeals ruling

Sixth Circuit rules court OK was not needed to terminate fund

The more than 10-year fight by a group of Delphi salaried retirees for their full pensions was dealt another blow, but perhaps not fatal should they ask for an appeal of the latest unfavorable court ruling.

That latest court ruling from the U.S. Sixth Circuit Court of Appeals backs a Michigan federal court judge’s decision that sided with the Pension Benefit Guaranty Corporation to dismiss the salaried group’s lawsuit filed in 2009 over lost retirement funding.

The March 2019 lower court ruling was appealed in April 2019 to the U.S. Sixth Circuit Court of Appeals in Cincinnati, a three-judge panel of which ruled this week the PBGC did not need court approval to terminate the pension fund, and did not violate their due process rights or act recklessly in making the decision.

“My reaction, I think everybody’s reaction that had anything to with this, was really terribly disappointed,” said Chuck Cunningham, legal liaison for the Delphi Salaried Retirees Association. “We thought the appellate court would look at this thing, we felt, in a more in-depth manner (and) would find in our favor. We thought it got a cursory look at the district court and we felt the appellate court would give us a better shot at this thing — and it didn’t turn out that way.”

The group has 45 days from when the court ruled Tuesday to decide whether to appeal.

According to Cunningham, the association can ask the three judges to examine the case again with clarification from the association, or request the full court to review the matter.

“Those options are available to us, as is over a certain period of time, within a certain period of time, the option of trying to get certified at the Supreme Court,” Cunningham said.

“That determination has not been made because we need some time with the attorneys to figure it out,” he said. “It doesn’t have to be done immediately. We have time before we have to make that decision … so we’ll take our time. It’s not something we need to or should hurry with.”

The Delphi Salaried Retirees Association sued the PBGC, which took over the employee pensions after Delphi declared bankruptcy. The move resulted in lower pension payments to retirees, some by as much as 70 percent.

About 1,500 local salaried retirees were affected.

The appeal raised several issues with the lower federal court’s ruling. That ruling determined the way PBGC came to be responsible for the pensions of the 20,000 or so Delphi salaried retirees and pension participants did not break any laws. The court also ruled the group didn’t show PBGC’s taking over the plan was arbitrary or capricious.

The appeals court agreed.

“In sum, the retirees have not raised any argument warranting reversal,” the ruling states.

Delphi, formerly Packard Electric that at one time was part of General Motors’ parts division, filed for bankruptcy in October 2005 and emerged four years later. While Delphi was in bankruptcy protection in 2009, it relinquished responsibility for all its employee pensions to PBGC.

General Motors continued contributing to union-represented retirees, but salaried retirees were left with substantially reduced pensions. Those salaried retirees have argued the administration of former President Barack Obama ignored them while guiding GM through its own 2009 bankruptcy.

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