A bipartisan group of lawmakers reintroduced a bill to restore benefits for about 20,000 retirees in a terminated Delphi Corp. pension plan.
The Susan Muffley Act, which was reintroduced Feb. 1 by Reps. Dan Kildee, D-Mich., Mike Turner, R-Ohio, Gwen Moore, D-Wis., and Claudia Tenney, R-N.Y., originally passed the House in July, but the legislation never moved in the Senate.
"If you work hard and play by the rules, you deserve to retire with dignity," Mr. Kildee said in a news release. "Delphi salaried retirees lost their pensions through no fault of their own, and that's not right. These hardworking retirees have waited for over a decade for the benefits they earned."
In 2009, the Pension Benefit Guaranty Corp. took over the Delphi plan after the company broke off from General Motors and eventually filed for bankruptcy in 2005. The company then emerged from bankruptcy as Delphi Automotive LLP in 2011 without pension obligations.
In a government bailout, GM agreed to "top up" pension benefits to original levels for workers covered by three union agreements; however, salaried workers and others received reduced benefits because of PBGC benefit caps. PBGC cut Delphi retirees' benefits by as much as 70%.
The bill aims to restore benefits by requiring the PBGC to recalculate and adjust each plan participant's monthly benefits payment. The PGBC is also required to apply the recalculation to monthly payments made previously and make a lump-sum payment for any additional benefits based on the recalculation. The bill is named after the late Susan Muffley, the wife of a Delphi participant who had his benefits reduced.
Delphi plan participants started a legal campaign against the PBGC in 2009, claiming the agency violated ERISA's rules by shutting the pension plan, but they lost every challenge along the way.
The participants petitioned the U.S. Supreme Court to hear the case in 2021, but the court declined in January 2022, meaning a pro-PGBC ruling by the 6th U.S. Circuit Court of Appeals in Detroit from September 2020 remains in force. The appeals court upheld a decision, made in March 2019, by a U.S. District Court judge in Detroit who ruled the PBGC had acted properly.
"If it passes, this bill will restore fairness and dignity in retirement," said Bruce Gump, chairman of the Delphi Salaried Retiree Association, in the news release. "It will relieve the suffering of thousands of salaried and hourly workers who were left behind after GM filed for bankruptcy. It will greatly help their families and their communities also. This is very important and necessary legislation."
