Delphi salaried retirees are seeing retirement payments from the Pension Benefit Guaranty Corp. change in an unexpected way.
On June 1, some salaried retirees began receiving two pension payments a month instead of one. A second payment is coming from Prudential Insurance Co. of America, based on an annuity General Motors purchased years ago with retirement contributions paid by workers. The annuity reflects those contributions.
The two monthly payments should equal what salaried retirees have been receiving all along, the PBGC told retirees in an April 30 letter. For example, if a retiree was receiving $1,500 monthly, he or she may now be paid $1,300 from the PBGC and $200 from Prudential.
But the change has left some retirees with questions. Why are they receiving the split payments in mid-2013, nearly four years after a then-bankrupt Delphi relinquished its pension obligations to the PBGC?
Den Black — a Piqua native who often speaks for a group of Delphi non-union retirees called the Delphi Salaried Retirees Association (DSRA) — have asked the PBGC for an explanation.
“This is completely out of the blue after three-and-a-half years,” Black said.
“They should have split it out (the payments) from the very, very beginning,” said Tom Rose, a Washington Twp. Delphi retiree who saw his pension cut by 40 percent.
About 20,000 salaried retirees saw their pensions reduced when the PBGC took them over in 2009. The agency has said that federal law caps how much it may pay retirees whose pensions it controls. The DSRA is suing the PBGC in Detroit’s federal court to restore their full pensions.
Philip Langham, PBGC benefits administration and payments director, said it took this long to negotiate with the three insurance companies that had been involved. The money and payments are not new, he said.
“It’s just that the PBGC has been making them (the annuity) payments all along,” Langham said. “It’s not like these are new payments.”
As annuities, the value of the contributions has not increased with time, he added.
Langham called the Delphi bankruptcy a “one-off” — a uniquely complex corporate bankruptcy and pension case for the PBGC.