HR-1357-119
Referred to the Committee on Education and Workforce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Sponsored by Michael Turner (R-OH)
What it does
This bill would require the Pension Benefit Guaranty Corporation (PBGC) to restore full monthly pension benefits to eligible former employees of Delphi Corporation, whose pension plans were terminated during General Motors' 2009 bankruptcy. The PBGC would recalculate each affected participant's monthly benefit to the full vested amount, apply that recalculation retroactively to past payments, and issue a lump-sum payment covering the difference. The bill would establish a dedicated fund, appropriated by Congress, to cover these payments and would specify how the lump-sum payments are treated for federal tax purposes.
Who benefits
Former Delphi Corporation salaried and hourly employees whose pension benefits were reduced when the PBGC took over their plans in 2009 — estimated at roughly 20,000 individuals. Surviving spouses and dependents of deceased Delphi retirees who receive derivative benefits. Retirees in Michigan, Ohio, and other Midwest states where Delphi had major operations. Tax professionals and financial advisors who would assist retirees in managing lump-sum payments.
Who is hurt
U.S. taxpayers broadly, who would fund the dedicated appropriation through federal spending. The PBGC, which would bear administrative costs of recalculating and reprocessing potentially decades of benefit payments. Other pension plan participants in PBGC-insured plans who did not receive similar legislative relief, creating a potential equity concern. Federal budget accounts competing for the same discretionary or mandatory funding.
Supporters argue
Supporters argue that Delphi salaried retirees — unlike their unionized counterparts — lost between 30% and 70% of their earned pension benefits when GM's bankruptcy allowed the PBGC to take over their plans at reduced guarantee levels, a disparity that a 2012 PBGC Inspector General report found was influenced by political decisions favoring certain employee groups. They contend that these workers fulfilled their end of a contractual promise over decades of employment and that Congress has both the authority and the moral obligation to make them whole using the same federal resources that funded GM's broader bailout.
Opponents argue
Opponents argue that the PBGC's benefit limits are set by statute and applied uniformly, and that creating a special legislative carve-out for one company's retirees sets a precedent that could expose the federal government to unlimited liability for other terminated pension plans. They contend that the bill's cost — paid entirely through new federal appropriations rather than the PBGC's insurance fund — amounts to a direct taxpayer subsidy that bypasses the established pension insurance system, and that Congress should address any systemic inequities through broader PBGC reform rather than company-specific legislation.