Legal road ends for Delphi retirees
Supreme Court declines to hear salaried employees’ appeal
The U.S. Supreme Court has declined to hear the Delphi Salaried Retirees Association appeal concerning the involuntarily terminated Delphi Salaried Pension Plan.
That termination in 2009 affected nearly 20,000 seniors who worked as salaried employees for the then Delphi Corp.
The retirees association, in a statement, expressed “profound disappointment” in the denial.
“The Pension Benefit Guaranty Corporation will continue to be allowed to terminate pensions without the workers and retirees who earned them having any opportunity to even object or check the numbers,” Bruce Gump, association board chairman, said. “These men and women continue to suffer the results of the unequal and unfair treatment by the PBGC.”
Adding to the association’s disappointment, he said, is seven state attorneys general, including Ohio’s Dave Yost, and 17 members of Congress also asked the nation’s high court to hear the case, believing the court should review the legal issues.
The brief was filed in early November. It has been a more than 12-year effort to restore pensions slashed when the auto-parts maker went bankrupt. “These Delphi retirees are entitled to due process,” Yost said at the time.
The pensions of the thousands of salaried retirees, including about 1,500 local retirees, were cut, some by as much as 70 percent, when the PBGC took over responsibility after Delphi, which at one time was part of General Motors’ parts division, emerged from bankruptcy.
GM continued contributing to union-represented retirees, but salaried retirees were left with substantially reduced benefits.
The salaried retirees sued and have been in court since.
What retirees wanted the Supreme Court to review was the decision in the U.S. 6th Circuit Court of Appeals that sided with a March 2019 Michigan federal court judge’s ruling that dismissed the lawsuit against the PBGC. The attorneys general argue the retirees had no opportunity to challenge the plan termination before it was terminated. The bankruptcy court refused to hear their challenge and then the PBGC terminated the pensions without a court decision, the brief states.
The PBGC’s defense in court — according to the retirees association — was summarized in an appellate court statement: If the way we have interpreted the law that allows us to terminate pension plans by a simple agreement with the plan’s administrator was wrong, then nobody in Congress ever has objected.
“Well, now 16 congressional representatives and one senator have objected and in no uncertain terms in the Amicus (friend of the court) brief they filed supporting our petition to the Supreme Court,” the association continued. “The PBGC needs to admit they were wrong and change their ways. We believe pension plan participants own their pensions, and the government has no right to take them without even a hearing.”
Gump explained that denial of the Delphi Salaried Retirees Association petition simply means the court will not take up this case.
“There can be many reasons for that including the fact that they only accept a certain number of cases each year,” he said. “This does not mean the PBGC did not illegally terminate our pension plan; it simply means they are getting away with it right now. It will be up to others in the future to fix this if they can.”
He noted the negative economic impact to the American economy over the last 13 years for this group has been estimated to be in the hundreds of millions of dollars.
“Promised pension benefits remained in the PBGC’s coffers instead of going into the pockets of seniors who earned them and the communities where they live, to help them through their retirement years,” he said.
Concerning the future, Gump noted the DSRA continues to plead for equal treatment from Congress as retirees represented by labor unions have received from enactment of pension legislation benefiting them. “There is a bipartisan legislative effort to restore our pension plan. The Biden administration itself has said that the retirees deserve their pensions, and that congressional action will be required. We very much appreciate the efforts of U.S. Reps. Dan Kildee (D-Michigan), Mike Turner (R-Ohio) and Tim Ryan (D-Ohio).”