House bill

US House Bill Restores Pension for Local Delphi Retirees | Local News

The U.S. House of Representatives on Wednesday approved legislation that would fully restore local Delphi retiree pensions, which were cut in 2009 when General Motors was bailed out of bankruptcy.

The Susan Muffley Act, or House Resolution 6929, passed 254-175 and is now before the Senate for approval.

The bill would restore the pensions of a total of 20,000 Delphi Corp. employee retirees, including more than 4,000 in Indiana. These workers’ pensions were slashed by up to 70% when they were turned over to the US Pension Benefit Guarantee Corporation (PBGC) following GM’s bankruptcy filing.

However, hourly GM retirees, who were represented by the United Auto Workers, did not see their pensions cut.

Under the bill, pensioners would start receiving 100% of their pensions, plus a lump sum payment to cover the amount of money they have lost since 2009 due to their reduced payments. The lump sum would be accompanied by an additional 6% interest.

Dave Sedam, who worked at Kokomo General Motors and Delphi factories for 31 years before retiring in 2005, said the bill would provide a financial boon to local retirees. He estimated that between 2,500 and 3,000 local workers would have their pensions fully restored.

Sedam said his pension had been cut by 40%, forcing him to work part-time until he was 62 and could start receiving Social Security benefits.

“I’m not saying I’m broke or anything like that,” he said. “But you know, I had to go back to work so we could survive. And that’s what a large majority of people had to do.

If approved, the bill would pay a total of $612 million next year to retirees, according to the Congressional Budget Office’s cost estimate. With around 14% of the country’s Delphi retirees living in the Kokomo area, a significant portion of that money would flow back to the area.

However, the bill does not include reinstating retiree health care and life insurance coverage, which were also cut during GM’s bankruptcy. Sedam said that for some people, not having employee-funded insurance ended up costing more than cuts to their pensions.

“If someone really had medical issues, and all of a sudden they’re like, ‘Oh, I’m sorry for your luck, because you don’t have health care,’ how are you going to pay for that?” he said. “You’re going to lose everything you have, which a lot of people have done.”

Congress ended up approving a special tax credit for Delphi retirees, which in some cases paid up to 72% of their healthcare costs.

The Susan Muffley Act was introduced in March by Michigan Congressman Dan Kildee, deputy leader of the House Democratic Caucus whip. He said it was “wrong” the way Delphi retirees were treated, and the bill simply pays people back what they are owed.

“While the government saved General Motors, these workers lost their pensions through no fault of their own,” Kildee said in a statement. “Congress has this opportunity to right this wrong. These hard-working retirees have waited too long to receive the benefits they have earned.

Five of Indiana’s nine U.S. Representatives voted in favor of the bill, including Republicans Jim Baird and Victoria Spartz, who together represent most of Kokomo and Howard and Tipton counties. Republican Jackie Walorski, who represents Miami County, voted against the bill.

The issue of restoring pensions to Delphi retirees also made national news in 2020, when former President Donald Trump said he was considering intervening in the more than decade-long struggle.

Trump issued a presidential memorandum that year urging the leaders of his administration to seek to restore full pensions to retired Delphi employees. Peter Navarro, Trump’s aide and director of trade and manufacturing policy, said at the time that consolidating retiree pensions was a “high priority” for the president.

However, no action was taken until the introduction of the Susan Muffley Act in March.