The U.S. Supreme Court on Tuesday declined to hear a case brought by former salaried employees of the auto supplier Delphi who argued their pensions were wrongly cut when those for union workers were preserved.
Ron Beeber, a spokesman for the Delphi Salaried Retirees Association (DSRA), said the decision brings to an end a 12-year legal battle against the Pension Benefit Guaranty Corp. (PBGC), which is the insurer of last resort when pension plans are deemed unable to meet their obligations.
Some 20,000 salaried employees of Delphi, which was based in Troy, Michigan and spun off of General Motors in 1999, saw their pensions reduced even as GM agreed to fully fund those for union workers of the company. That occurred as GM, which needed Delphi parts, went through a government-arranged bankruptcy and rescue in 2009.
Throughout the case, salaried employees argued that GM, the government and the PBGC shouldn't be able to discriminate between them and union workers, especially since GM's rescue was initially funded by some $50 billion in government investments.
Over the years since, several state officials and members of Congress from both parties have said the salaried employees should get their full pensions, especially since they were never allowed to contest the health of their plan ahead of it being terminated in an agreement between the PBGC and Delphi. Both President Joe Biden and then-President Donald Trump mentioned it on the campaign trail two years ago.
In 2020, the U.S. Court of Appeals for the 6th Circuit in Ohio ruled against the retirees, saying it was within the rights of the PBGC — which is funded by insurance premiums and assets from terminated plans, not taxpayer dollars — to terminate the retirees' plan and reduce their benefits regardless of what happened to the union workers' plan. That set the stage for the appeal to the Supreme Court.
The court declined to hear the case without comment in a list of brief orders Tuesday morning. While it ends the legal case, DSRA officials said they would still try to get Congress and the White House to do something to restore their pensions, which were cut by 30% or more.
"The Pension Benefit Guaranty Corporation will continue to be allowed to terminate pensions without the workers and retirees who earned them having any opportunity to even object or check the numbers," said Bruce Gump, DSRA chairman. "These men and women continue to suffer the results of the unequal and unfair treatment by the PBGC."
"The PBGC needs to admit they were wrong and change their ways," Gump continued. "We believe pension plan participants own their pensions and the government has no right to take them without even a hearing."
Gov. Gretchen Whitmer and state Attorney General Dana Nessel were among those arguing for the retirees' claims to be heard.
U.S. Rep. Dan Kildee, D-Michigan, has been among those leading efforts in Congress to restore the retirees' pensions along with Reps. Mike Turner, R-Ohio, and Tim Ryan, D-Ohio. So far, however, no legislation has been put forward in the current Congress to address the retirees' claims.
