Home Nurse income Rejected by justice, pensioners take their last shot to save pensions

Rejected by justice, pensioners take their last shot to save pensions

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Dave Muffley poses outside one of Delphi Corporation's factories in Kokomo, Ind., Monday, July 11, 2022. As General Motors Corp.  suffered the largest industrial bankruptcy proceeding in history and the federal government negotiated a corporate restructuring, Muffley's healthy retirement savings would be cut by 70% and his life's trajectory would take a dramatic spiral down.  (AP Photo/Michael Conroy)

Dave Muffley poses outside one of Delphi Corporation’s factories in Kokomo, Ind., Monday, July 11, 2022. As General Motors Corp. suffered the largest industrial bankruptcy proceeding in history and the federal government negotiated a corporate restructuring, Muffley’s healthy retirement savings would be cut by 70% and his life’s trajectory would take a dramatic spiral down. (AP Photo/Michael Conroy)

PA

Dave Muffley thought he did when it came to a strong retirement. The Indiana man spent about 30 years as a salaried maintenance technician for Delphi Corp., a subsidiary of General Motors Corp., and expected to retire with a comfortable income by the time he hit 62 year.

But when GM plunged into the largest industrial bankruptcy proceeding in history in 2009 and the federal government brokered its restructuring, Muffley’s planned retirement package was curtailed.

The Russiaville resident, now 68, has lost 30% of his retirement savings, his promised healthcare coverage and his trust in the government.

Muffley is one of nearly 20,000 Delphi workers affected by GM’s bankruptcy, and many have spent the past 13 years fighting to get back what they lost. After the U.S. Supreme Court declined to hear their case this year, the retirees were cut off from their last legal recourse.

Now they are looking to Congress, where legislation to restore workers’ retirement savings has won support from left and right, and passed the House on Wednesday. Supporters hope the Senate will follow suit.

The bill is named the Susan Muffley Act, after Dave’s wife, who fell ill and died as they grappled with the hit to her pension fund.

The pensioners allege they were discriminated against as salaried employees, compared to union-covered workers whose pensions were preserved during the bankruptcy. Salaried employees are the engineers, technicians, and mid-level employees who fall between the well-paid executives and the unionized workers of the company.

After taking a Delphi buyout at 55 to avoid a possible layoff, Muffley says, he took one job after another to guide him until he could retire at 62. It was around this time that his wife was diagnosed with pancreatic cancer and died. within three years.

“Things fell apart, and things fell apart in a big way,” Muffley says. He estimated he had lost at least $130,000 in savings due to pension cuts over the years.

Despite bipartisan support, some members of Congress fear the government will bail out pension funds.

For retirees, the fight to get the legislation into law may be the latest battle in an ordeal that began when workers were swept up in the macroeconomic riptides of the recession.

Muffley and others started a support group in 2009 for workers at the auto parts company who had to overcome not only job losses, but also pension cuts and the loss of health plans.

Retirees tell stories of loss, severe depression, other health issues and resulting divorce. Some of their children have turned down college.

Presidential candidate Joe Biden said in September 2020 that he would work to help restore Delphi workers’ retirement savings. The following month, President Donald Trump ordered federal agencies to act on the issue.

But nothing came out of Trump’s memo. Nothing happened in the first 18 months of the Biden administration either.

Various legislative proposals to help Delphi workers have come and gone over the years without becoming law. The latest bill, which passed the House by a vote of 254 to 175, would restore workers’ benefits and make up for what they have lost since 2009.

Members of Congress from both parties, primarily from Michigan, Indiana and Ohio, sponsored the legislation. The White House itself issued a statement in support of the bill, saying the administration “supports a secure retirement for affected workers.”

But there are skeptics. During Wednesday’s House debate, Rep. Bob Good, R-Va., called the measure “a Democratic bailout bill by nanny-state sponsors.”

“Why should voters in my 5th district in Virginia pay for someone else’s pension plan? he said.

When GM filed for bankruptcy in June 2009 due to massive losses during the Great Recession, the company said it would not meet the pension obligations of Delphi unit employees – largely because it did not had no agreement with them, as she had negotiated with unions for hourly workers.

The Pension Benefit Guaranty Corp. The government then assumed responsibility for the pension scheme for the 20,000 employees and reduced monthly benefits for workers and pensioners if they exceeded the statutory maximum benefit the agency was guaranteed to pay. As a result, the pensions of some retirees have been reduced by up to 70%.

The arrangement unfolded in conjunction with a deal brokered by Obama administration officials who led a task force that gobbled up millions of dollars to save GM.

Part of the rationale was the need to prevent unionized workers from striking, while salaried workers were seen as more durable. The overriding objective was to preserve the auto industry and avoid an even deeper recession.

In January, the Supreme Court rejected efforts by Delphi retirees to review their case. The court effectively upheld a federal court ruling that the law allows troubled pension plans to be closed without court approval.

Rep. Dan Kildee, D-Mich., sponsor of the bill, told The Associated Press that the case was “particularly egregious because it was the federal government that engineered the bankruptcy.”

Another sponsor, Rep. Mike Turner, R-Ohio, called it a case where “the feds picked winners and losers here – and that’s not fair.”

Julie Naylor, a 68-year-old former nurse who lives in a suburb of Greenville, South Carolina, says restoring her husband’s pension and health care would mean she could afford basic necessities for her family. Her husband, Bruce Naylor, suffered a stroke after routine outpatient surgery, caused by an undiscovered brain tumour. With her husband now partially paralyzed, Julie Naylor says the medical bills have piled up without the health care she was promised.

“We live a very austere life and a very uncertain life,” she said. “I never thought he could lose half his pension and half his savings.”

The legislation would require the government to “top up” the pensions of salaried Delphi workers, as GM did for union workers.

Bill Kadereit, president of the National Retiree Legislative Network, said in many ways the government sacrificed those retirees to get a bigger deal.

This is what made the situation so painful for Muffley.

“I can’t believe our government would do something like this,” he said before the House vote.

And Muffley had a warning for others who might think their own promised benefits are secure: “If the government could do this to us, what else could they do to you?”

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Associated Press writer Kevin Freking contributed to this report.