Pension group wants to recoup overpayments made to Delphi retirees

Bill would block plan to cut into Delphi pensions

Unmatched coverage

The Dayton Daily News has covered the attempts by Delphi salaried employees to collection their pension plans for nearly a decade. You can count on us to continue this in-depth coverage about the issue.

Some Delphi retirees who for years had to wait for their retirement benefits are now being told by a federal agency they were overpaid for their pensions.

U.S. Sen. Sherrod Brown, D-Ohio wants to stop the Pension Benefit Guaranty Corp. from trying to recoup the overpayment. He plans to introduce legislation that would block the agency from trying to collect what the agency says are overpayments in pensions paid to some Delphi retirees.

“PBGC made the decision after determining retirees had previously been overpaid through no fault of their own,” Brown’s office said in a statement.“In light of this announcement, Brown will introduce legislation to prevent PBGC from cutting retirees’ benefits.”

“Delphi salaried retirees throughout Ohio have waited months for clarity regarding their pensions — and now PBGC wants these retirees to pay for PBGC’s mistake. That’s just wrong,” Brown said in the release.

In an interview Monday, Brown said his office understands that letters from the PBGC to retirees are starting to go out announcing that there will be recoupments — or cuts — from some pensions, reducing pay that retirees contend is already too low.

Pay cuts of two to five percent are what his office has been told to expect, the senator said.

“We’re going to try to stop them,” Brown said.

When Delphi’s pension plan was terminated in 2009, 20,000 Delphi salaried retirees, including about 5,000 Ohioans, lost up to 70 percent in benefits. Auto parts producer Delphi was going through Chapter 11 bankruptcy protection at the time.

On its web site, the PBGC outlines its plan for collecting what it says are the overpayments.

“You will not have to repay the overpayment in single lump sum,” the agency said on its site. “To reduce the burden on participants and beneficiaries, PBGC collects the overpayment by ‘recoupment,’ which means that we collect the amount you have been overpaid by reducing your monthly benefit by a percentage called the recoupment percentage.”

The site says “generally,” recoupment is capped at 10 percent of a retiree’s monthly payment.

The PBGC is expected to tell retirees what their payments will be and whether recoupments must be made.

Retired salaried retirees have been suing the PBGC in federal court since 2009 to recover their full pensions. Retirees contend that salaried retiree pensions were sacrificed at the direction of the U.S. Treasury in a bid to speed first Delphi’s, then General Motors’, respective stays in bankruptcy protection.

“In the end, I don’t want the (retirees) to get hurt, the workers to get hurt,” Brown said. “And they have been already.”

Washington Twp. Delphi salaried retiree Tom Rose, 69, said the PBGC offered initial pension payments before zeroing in on more precise benefits amounts. Some retirees have begun receiving those final benefit amounts in the past several months, but not all have been calculated yet, he said.

While his expected pension was cut by 40 percent when Delphi relinquished its pension obligations to the PBGC, Rose said that after his more precise benefit was determined, he actually saw a 10 percent bump in payments.

“Every situation that I’m aware of has been an increase in the monthly pension,” Rose said. “It’s still well short of what we’re supposed to have.”

The PBGC did not respond to a message seeking comment Monday.

About the Author