PBGC: Delphi retirees’ claim is irrelevant

By GRACE WYLER

gwyler@vindy.com

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The Delphi Salaried Retiree Association’s recently submitted evidence is irrelevant to the Pension Benefit Guaranty Corp.’s decision to terminate the salaried pensions, the federal pension agency said.

In a June 1 filing, the retirees association says the PBGC failed to recognize Delphi’s October 2008 assessment of the pension plan that showed the plan was 85 percent funded.

The declaration says the PBGC’s April 2009 assessment of the salaried pension plan’s funding levels showed a 45 percent increase in pension liabilities from Delphi’s assessment of the same plan.

The association claims the evidence shows the PBGC was not justified in its involuntary termination of the salaried pension plans and manipulated its liability assessment to get the desired outcome.

The termination resulted in a 30 percent to 70 percent reduction in pension benefits for Delphi’s salaried retirees.

In its response, filed Thursday, the PBGC said the October 2008 assessment is irrelevant because at that time, Delphi intended to reorganize in bankruptcy and upon exiting, continue to fund the salaried-pension plans.

When the PBGC did its April 2009 assessment, however, the automotive industry had collapsed, and Delphi no longer had financing for reorganization.

Upon liquidation, Delphi no longer would be able to support its pension plans.

Without Delphi as a sponsor, the plan’s interest rates and liabilities increased, the agency said.

As a result, the plan’s funding levels were significantly lower than they had been in October 2008, the agency said.

In response to the PBGC’s filing, Chuck Cunningham, a representative for the salaried retirees association, argued that the decision to liquidate Delphi should not have had any effect on the funding levels of the pension plans.

“This is exactly what we expected from the PBGC,” he said. “We don’t believe the liabilities were anywhere near where they said they were.”