The GAO released findings into its probe of how Delphi retiree pensions were treated in 2009, when the federally backed Pension Benefit Guaranty Corp. took over pension obligations from a then-bankrupt Delphi. The PBGC takeover meant reduced pensions for Delphi retirees, except some union-represented hourly retirees, who have had their pension reductions topped off by General Motors, which once owned Delphi.
Salaried Delphi retirees, including hundreds of Dayton-area residents, received no such support. Salaried retirees have argued that they were singled out and are suing in federal court for restoration of their full pensions. The PBGC pension takeover happened in July 2009, just after Treasury’s oversight of GM’s path through bankruptcy that year. Delphi left bankruptcy a few months after GM did, in October 2009, and a resolution of Delphi pensions was seen as crucial to assist GM.
U.S. House Speaker John Boehner, R-West Chester and U.S. Sen. Roger Wicker, R-Miss., asked the GAO in August 2010 for an independent analysis of the federal treatment of GM and Delphi retirees.
In response to the GAO’s findings summary, a Treasury spokesman e-mailed a statement that said: “The GAO report confirms what we have stated before, which is that the termination of the Delphi salaried pension plan was made by the PBGC in accordance with its standard procedures, not by Treasury. Although the Delphi bankruptcy was very difficult for its employees and retirees, the actions Treasury took to support the American auto industry helped save more than a million American jobs during a period of economic crisis.”
The GAO said that the PBGC’s role in taking over the Delphi pensions appeared to be “consistent with PBGC’s usual actions when terminating large (pension) plans.” The agency also said that what the PBGC recovered from Delphi on behalf of the pension plans was in line with recovery ratios in other large plan takeovers
However, the GAO said that the role GM played in the situation was “more unusual.” The office pointed to GM’s support for some union pensions, but not other hourly and salaried retirees.
And the GAO noted that Treasury had “multiple roles regarding pensions.” The federal government had invested more than $52 billion in a restructured GM as of March 2010.
Contact this reporter at (937) 225-2390 or tgnau@DaytonDailyNews.com.
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