Delphi retirees lose pension case

Former workers deciding whether to appeal decision

WARREN — A nearly 10-year pursuit by a group of Delphi salaried retirees to regain their full pensions is over — or at least it could be, if a ruling by a federal judge in Michigan isn’t appealed.

The latest document filed in the case, according to the court’s online docket, is a single-page judgment that states the case is closed.

It was filed Friday, the same day Judge Arthur J. Tarnow sided with the Pension Benefit Guaranty Corporation to dismiss the civil case filed in 2009 by the retirees group in an attempt to regain large portions of retiree pensions lost after Delphi declared bankruptcy, and the PBGC took over the pensions.

About 1,500 local salaried retirees were affected.

Tarnow 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. He also ruled the group didn’t show PBGC’s taking over the plan was arbitrary or capricious.

“The record establishes that the salaried plan was severely underfunded for guaranteed benefits at the time of termination — approximately 50 percent underfunded,” the ruling states. “There was no entity willing to sponsor the salaried plan upon Delphi’s liquidation.

“In this case, PBGC and Delphi agreed to terminate the salaried plan because the plan failed to meet the minimum-funding standard required under the Internal Revenue Code and would be unable to pay benefits when due,” the ruling states. “In light of Delphi’s liquidation, PBGC faced the very real possibility of an unreasonable increase in long-run loss if the plan was not terminated.”

Chuck Cunningham, legal liaison for the Delphi Salaried Retirees Association, said a determination is pending on whether to appeal the decision to the U.S. Sixth Court of Appeals in Cincinnati. The group has 60 days to file the appeal.

“We have been basically in constant contact with attorneys since the decision was made … and we are going to make our decision soon here. We have two choices. One is to let it stand and the other is to appeal it,” Cunningham said.

Said Bruce Gump of Warren, chairman of the Warren Legislative Group and vice chairman of Delphi Salaried Retirees Association board of directors, “If you stop to think about it, from their own sworn testimony, the reason this happened to us, according to the president’s auto task force, is they felt we were too small and weak to fight back … so they just stood aside and let bad things happen to us.”

He said even though the task force’s authority came from the president and money from taxpayers, it could decide based on “commercial necessity” whether the group should be treated equally.

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.

That move resulted in lower pension payments to retirees. General Motors continued contributing to union-represented retirees, but salaried retirees were left with substantially reduced pensions, some by as much as 70 percent. Those salaried retirees have argued the administration of former President Barack Obama ignored them while guiding GM through its own 2009 bankruptcy.

They also claim PBGC should have exercised its negotiating leverage with GM for the automaker to assume the salaried plan, but Tarnow wrote that was not a viable option.

“When offered the opportunity to assume the salaried plan, GM repeatedly, and emphatically, declined. In fact, no company offered to sponsor the salaried plan. Because funding the salaried plan could not continue without a sponsor, PBGC had no choice but to terminate,” the ruling states.