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Ohio attorney general files on behalf of Delphi retirees

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By Thomas Gnau, Staff Writer Updated 9:45 PM Wednesday, December 9, 2009

Ohio Attorney General Richard Cordray is backing an injunction against the Pension Benefit Guaranty Corp. (PBGC) on behalf of Delphi salaried retirees who fear the PBGC will drastically slash their pensions.

In August, bankrupt Delphi relinquished salaried and hourly retiree pensions to the PBGC, a federally backed agency. Such a move usually results in far lower pension payments, once the agency calculates what the law lets it pay.

While General Motors Corp. has said it will make up any difference in pension payments to hourly or union retirees, salaried Delphi retirees have received no such guarantee, even if they started their careers with GM.

Salaried retirees also lost Delphi health and life insurance coverage last year. Hourly retirees still have health and life coverage, but at higher costs.

Den Black, head of the group of salaried Delphi retirees suing the PBGC, welcomed Cordray’s involvement. Black estimates that fellow salaried retirees stand to lose 30-70 percent of pension payments in 2010’s first quarter if the PBGC takes control.

In its lawsuit, the salaried retirees association is trying to block the PBGC pension takeover.

“This brief supports our filing to obtain a temporary injunction which will prevent the PBGC from making any reductions in the monthly pension checks while our litigation remains incomplete,” Black said in an e-mail to the Dayton Daily News.

In an amicus brief filed this week in federal court in Michigan’s eastern district, Cordray urges the court to block the PBGC takeover with a preliminary injunction.

“Defendant PBGC’s plans would deliver a crushing blow: Such drastic reductions of hard-earned pension benefits will devastate not only thousands of Ohio retirees and their dependants who continue to depend on fulfillment of the commitments made by the former employers, but also a state and region,” Cordray wrote.

The PBGC “can’t just blunder on its own to a company just because it deems a company to be in trouble,” Cordray said in October.

Contact this reporter at (937) 225-2390 or tgnau@DaytonDailyNews.com.

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