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Retirees: Delphi could have afforded our pensions

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By Thomas Gnau, Staff Writer 12:14 PM Thursday, June 10, 2010

While Delphi salaried retirees wait for a judge to decide whether their lawsuit to restore their pensions goes forward, both sides in the suit are arguing over whether Delphi could have afforded its pension obligations.

Late last month, attorneys for those salaried retirees filed what they said was certification showing that Delphi’s salaried retiree program was only about 15 percent underfunded for the year ending Sept. 30, 2009.

In 2009, average pension plan funding for the 100 largest plans was about 18 percent underfunded, the retirees’ attorneys argued.

Last July, then-bankrupt Delphi relinquished pensions to the federally backed Pension Benefit Guaranty Corp., a move than meant markedly lower pensions for salaried retirees, many of whom actually spent the bulk of their careers working for General Motors, which owned Delphi until 1999.

Pensions for hourly retirees were also relinquished, but GM agreed to top off whatever pension losses those retirees suffered, as required by union contracts with GM.

Den Black, a Piqua native and head of the Delphi Salaried Retirees Association, which represents hundreds of Dayton-area Delphi salaried retirees, said of the certification, “This is more than the smoking gun. This is the bullet.”

On Wednesday, June 9, the PBGC responded to plaintiffs’ arguments with its own filing in a Michigan U.S. bankruptcy court.

“Delphi’s pension plans, including the salaried plan, were underfunded by billions of dollars in April 2009 and Delphi could no longer maintain them,” attorneys for the PBGC wrote.

Retirees hope to get a ruling soon from Judge Arthur Tarnow on whether their suit against the PBGC, the U.S. Treasury Department’s Auto Task Force and others can go forward.

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