Some Delphi Automotive salaried retirees are “cautiously optimistic” and “hopeful” their pensions will fully be restored now that President Donald Trump is considering intervening in the more than decade-long struggle.
Thousands of salaried retirees who worked for the automotive parts company saw their pension benefits substantially reduced and their health and life insurance axed completely after the company came out of bankruptcy and relinquished control of its pension to the federally chartered Pension Benefit Guaranty Corporation in 2009.
Retirees represented by unions, however, had their pensions "topped up" by GM thanks to a promise GM. The same was not made for Delphi's salaried employees and retirees, leaving a bad taste in the mouths of many salaried retirees who felt they received the short end of the stick.
According to Peter Navarro, Trump’s assistant and director of trade and manufacturing policy, making whole the retirees’ pensions is a “high priority” for the president.
“This has the president’s attention, and we’re moving,” Navarro told the Dayton Daily News last week. “We’re looking at it.”
Navarro told the Ohio newspaper the administration’s action will likely be an executive order that would likely call on the PBGC to increase pension payments.
“We have to run some legal traps first,” he said. “You look at your options. You have to look at what your statutory authorities are. You draft the document, then you have to run the traps over at the Office of the Legal Counsel and (the Department of) Justice. That takes some time.
“It’s a high priority. I will personally try to move this at least in terms of the legal review as quickly as we can.”
In September 2009, the salaried retirees formed a group called the Delphi Salaried Retirees Association and sued the PBGC, alleging the corporation’s decision to cut benefits – some as much as 70% – was illegal.
“What happened, we believe, was both illegal and immoral,” Chuck Cunningham, the legal liaison for the DSRA, told the Tribune Monday.
The lawsuit is still ongoing 11 years later, though courts have dealt only unfavorable rulings for the DSRA so far.
Most recently, on Sept. 1, a three-judge panel from the U.S. 6th Circuit Court of Appeals backed a Michigan federal court’s decision to grant summary judgment in favor of the PBGC.
Cunningham said there are still has a few more legal options it can pursue, including asking the full U.S. 6th Circuit Court of Appeals to review the case again or try and bringing the case in front of the U.S. Supreme Court.
“We’re not giving up,” Cunningham said.
The full restoration of retired salaried employees’ pensions would mean more money in the pockets for thousands of retirees who worked for Delphi in Kokomo and the states of Michigan and Ohio,
Dan Pitcock, a resident of Westfield, had 35 years of seniority at Delphi and worked in Kokomo beginning in 1989 when he took an early retirement in 2008 due to downsizing.
He said he saw his pension benefit cut 40% – roughly $12,000 a year – after the PBGC took over.
“So if you take away $12,000 in income, what would that mean to you?” Pitcock said. He is remaining “hopeful” the pensions benefits are restored, either through court, legislation or an executive order.
Dave Sedam, of Kokomo, worked at General Motors and Delphi for a combination of 31 years before retiring in 2005 abd also had his pension cut by 40%. While he had additional money saved for retirement, he said he had to work part-time until he turned 62-years-old to make up the difference.
Others, Sedam said, were not as lucky and could not afford to lose the money and healthcare benefits.
“I can honestly tell you, speaking for all of the DSRA members, losing the benefits was a killer,” he said. “When you lose your healthcare it’s very sad. A lot of them were very ill at the time, then all of sudden they lose their healthcare and now have to pay out of pocket. ... There were probably a lot of people who died because they couldn’t afford health insurance.”