U.S. House bill restores local Delphi retirees' pension

Jul. 28—The U.S. House of Representatives on Wednesday approved legislation that would fully restore local Delphi retirees' pensions, which were slashed in 2009 when General Motors was bailed out from bankruptcy.

The Susan Muffley Act, or House Resolution 6929, passed 254-175 and now moves to the Senate for approval.

The bill would in total restore the pensions of 20,000 salaried retirees of Delphi Corp., including over 4,000 in Indiana. Those workers' pensions were cut by up to 70% when they were handed over to the U.S. Pension Benefit Guarantee Corporation (PBGC) following GM filing for bankruptcy.

However, GM's hourly retirees, who were represented by the United Auto Workers, did not have their pensions cut.

Under the bill, retirees would begin receiving 100% of their pensions, as well as a lump-sum payment to cover the amount of money they lost since 2009 from their reduced payouts. The lump sum would come with 6% interest on top.

Dave Sedam, who worked at the Kokomo General Motors and Delphi plants for 31 years before retiring in 2005, said the bill would provide a financial boon for local retirees. He estimated between 2,500 and 3,000 local workers would have their pensions fully restored.

Sedam said his pension was reduced by 40%, forcing him to work part time until he turned 62 and could start receiving Social Security payments.

"I'm not saying I'm broke or anything like that," he said. "But you know, I had to go back to work so we could survive. And that's what a big majority of people had to do."

If approved, the bill would in total pay out $612 million next year to retirees, according to the cost estimate from the Congressional Budget Office. With around 14% of the nation's Delphi retirees living in the Kokomo area, a significant portion of that money would come to the region.

However, the bill does not include restoring retirees' health care and life insurance coverage, which were also cut during GM's bankruptcy. Sedam said for some people, having no employee-funded insurance ended up costing more than the cuts to their pensions.

"If somebody was really going through some medical issues, and all of a sudden they say, 'Oh, I'm sorry about your luck, because you don't have health care,' how are you going to pay for that?" he said. "You're gonna lose everything you have, which a lot of people did."

Congress did end up approving a special health tax credit for Delphi retirees, which in some cases paid up to 72% of their health care costs.

The Susan Muffley Act was introduced in March by Michigan Congressman Dan Kildee, chief deputy whip of the House Democratic Caucus. He said it was "wrong" how Delphi retirees have been treated, and the bill is simply reimbursing people what they're owed.

"While the government rescued General Motors, these workers lost their pensions through no fault of their own," Kildee said in a release. "Congress has this opportunity to right this wrong. These hardworking retirees have waited too long to receive the benefits they earned."

Five out of the nine Indiana U.S. representatives voted in favor of the bill, including Republicans Jim Baird and Victoria Spartz, who together represent most of Kokomo and Howard and Tipton counties. Republican Jackie Walorski, who represents Miami County, voted against the bill.

The issue of restoring Delphi retirees' pensions also made national news in 2020, when former President Donald Trump said he was considering intervening in the more than decade-long struggle.

Trump issued a presidential memorandum that year urging leaders in his administration to seek to restore the full pensions of salaried retirees of Delphi. Peter Navarro, Trump's assistant and director of trade and manufacturing policy, said at the time that making retirees' pensions whole was a "high priority" for the president.

However, no action was taken until the introduction of the Susan Muffley Act in March.

Carson Gerber can be reached at 765-854-6739, carson.gerber@kokomotribune.com or on Twitter @carsongerber1.