Summary
Restores the full pension benefits for retirees in specific terminated plans who had their payments reduced.
What problem does this solve?
When certain pension plans ended, many retirees did not receive the full retirement money they had earned. This act requires the government to pay these retirees their full original pension amount and give them back pay for the money they lost.
Who does this affect?
- Retirees of specific terminated pension plans (including Delphi)
- Pension Benefit Guaranty Corporation (PBGC)
What does this bill do?
Restores full pension benefits
Requires the Pension Benefit Guaranty Corporation (PBGC) to recalculate benefits for eligible participants of six specific pension plans to equal their full vested amount, ignoring previous government limits.
Provides back pay for past benefit cuts
Orders the PBGC to make a one-time, lump-sum payment to retirees for the benefits they lost in previous years, plus 6% interest.
Establishes a new trust fund
Creates the "Delphi Full Vested Plan Benefit Trust Fund" in the U.S. Treasury, funded by the government's general fund, to pay for the increased benefits.
Spreads out tax burden on back pay
Allows retirees to spread the income tax on their lump-sum back payment over a three-year period to avoid a large tax bill in one year.
Specifies eligible retirees
Defines eligible participants as those in six named plans (including the Delphi Hourly-Rate plan) who are not covered by separate 1999 GM union agreements.
What is the real world impact?
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Uses public funds for a private pension bailout
Creates a special exception for a select group of pension plans, funding their full benefits from the Treasury's general fund. This could be seen as using taxpayer money to cover private obligations.
When does this start?
The changes would take effect after the bill is passed, with specific deadlines for certain actions.
Lump-sum back payments
The PBGC must make lump-sum payments for past-due benefits within 180 days after the bill is passed.
Recalculation of monthly benefits
The PBGC must recalculate monthly benefits and adjust future payments as soon as possible after the bill is passed.