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Delphi pensions absorbed by government

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Delphi Corp. 30 year retiree, Dave Heizer, may be forced to sell his home after the government’s Pension Benefit Guaranty Corp. took over Delphi’s retirement pension plan. Heizer and other former Delphi employees could lose up to 40 percent of their basic pension payments.

Staff photo by Jim Noelker Delphi Corp. 30 year retiree, Dave Heizer, may be forced to sell his home after the government’s Pension Benefit Guaranty Corp. took over Delphi’s retirement pension plan. Heizer and other former Delphi employees could lose up to 40 percent of their basic pension payments.

The move to affect some 4,500-area retirees who can expect a 'huge cut,' an ex-union official said.

By Thomas Gnau, Staff Writer Updated 8:16 PM Wednesday, July 22, 2009

Thousands of local Delphi Corp. retirees will have their pensions absorbed by the Pension Benefit Guaranty Corp., the government agency said Wednesday, July 22.

Nationally, the PBGC is assuming responsibility for the pension plans of some 67,000 Delphi salaried and hourly retirees. Delphi, mired in Chapter 11 bankruptcy protection since October 2005, can’t afford to maintain the plans and General Motors Corp. — Delphi’s biggest customer and its former owner — has said it will not assume those responsibilities, the PBGC said.

The move will affect some 4,500 Dayton-area retirees, estimated Dave Heizer, 59, an hourly retiree after 30 years with Delphi and former bargaining chairman with the International Union of Electronic Workers-Communication Workers of America Local 755.

Heizer, of Sugarcreek Twp. , said many retirees can expect a pension cut. Pensioners can expect only about 60 percent of their basic pension, he said.

“It’s a huge cut,” Heizer said.

In 2009, the maximum benefit for a 65-year-old is $54,000, the agency said. Pensions are lower for those who retire earlier or select survivor benefits, the PBGC said.

In a statement, the agency said it can’t estimate individual benefit amounts until “several months” after it becomes trustee of the pension plans.

Jim Gudorf, 65, of Miami Twp., had 23 years with Delphi as a salaried worker.

“I’m getting everything from the government now, health care, Medicare,” Gudorf said with a chuckle.

He wasn’t surprised by the announcement. Earlier this year, the auto parts producer sought and won permission from a New York bankruptcy court judge to pull health care and life insurance benefits from salaried retirees after March 31.

“I kind of expected it,” Gudorf said. “It was coming down the pike. We just didn’t know for sure.”

The agency said the move affects 47,000 hourly and 20,000 salaried pensioners.

The PBGC said it expects to be responsible for about $4 billion of the Delphi hourly pension plan’s nearly $4.4 billion shortfall. It also said it expects to handle about $2.2 billion of the Delphi salaried pension plan’s estimated shortfall of $2.6 billion.

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