House and Senate bills H.R.1357, H.R.1895, S.1950 call for restoring a pension plan that was wrongfully terminated by the U.S. Government under the Obama administration.
A traditional Pension Benefit Guaranty Corporation (PBGC) pension termination occurs when the PBGC itself initiates the termination of a company’s failed pension plan. This termination was uniquely different.
This Would NOT Be a Bailout of a Troubled Pension Plan
The Delphi Salaried Retirees Pension Plan (DSRP) was a traditionally well-funded and well-managed plan when terminated by the PBGC in mid-2009. According to a credentialed actuarial firm, it was more than 86% funded 10 months prior to termination. The DSRP’s funding status at that time was no worse than the vast majority of other similar pension plans whose valued assets had also plummeted temporarily because of the 2009 recession.
Restoring This Pension Plan Would NOT Set a Precedent for other Plans
Extraordinary circumstances surrounded the U.S. Government’s 2009 termination of the Delphi Salaried Retirement Plan (DSRP), unlike any other. The Government made an unprecedented decision in 2009 to intervene in the private GM bankruptcy. But GM’s biggest supplier, Delphi Corp., was working through the final steps of its own bankruptcy, so the Government interfered in that, too. After a rushed 40-day bankruptcy, the government’s influence on the PBGC resulted in GM salaried and hourly pensions being protected as well as most Delphi hourly pensions. But it was Delphi salaried retirees who were singled out for pension termination. This termination was uniquely different from every normal pension termination initiated by the PBGC. Government picked winners and losers!
Conclusion: The PBGC didn’t initiate the salaried pension plan’s termination because it was failing. It yielded to the Administration’s plan to rescue General Motors. Protecting these retirees took a back seat. Please see our “Congressional Intent” document with PBGC testimony showing how ERISA law was not followed, and the PBGC failed to protect retirees.