Bipartisan Bill Aims to Restore Delphi Retirees’ Pension

A bipartisan group of U.S. representatives has reintroduced legislation to restore the pensions of more than 20,000 retirees of former General Motors unit Delphi. The bill aims to provide back pay for pension payments to retirees of the auto-parts maker, which was created as a spin-off of GM in 1999 but filed for bankruptcy protection in 2005.

The proposed legislation is backed by Representatives Dan Kildee, D-Michigan, Mike Turner, R-Ohio, Claudia Tenney, R-New York, and Gwen Moore, D-Wisconsin. The states with the most Delphi retirees are Michigan, Ohio, Indiana and New York.

The bill’s supporters say the back pay will cover pension payments the retirees should have been receiving for the past 13 years via a lump-sum payment equal to the difference between the benefits that have been paid out and what retirees would have been paid without limitation—plus 6% interest. The bill would also restore full pension payments going forward.

In 2008, GM assumed responsibility for some of the Delphi hourly pension plan and was expected to take back the entire plan. However, during the financial crisis of 2009, GM filed for bankruptcy and said it could not afford to take on Delphi’s pensions.

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A group of 21,000 Delphi salaried employees who worked at the company’s Dayton, Ohio, plant had been covered by a single-employer pension; however, GM closed the plant and voluntarily terminated the fully funded pension of the salaried employees. Later that year, the Pension Benefit Guaranty Corporation assumed responsibility for Delphi’s six pension plans that, at the time, covered 70,000 workers and retirees, while the group of 21,000 Dayton workers formed the Delphi Salaried Retirees Association.

Last year, Kildee introduced the Susan Muffley Act, which passed in the House but never came before a full vote in the Senate after Republicans voted against a request for unanimous consent, which could have fast-tracked the bill. It is named after a deceased member of the Delphi Salaried Retirees Association, Susan Muffley, who was married to a Delphi retiree.

“Delphi salaried retirees lost their pensions through no fault of their own, and that’s not right,” Kildee said in a statement. “These hardworking retirees have waited for over a decade for the benefits they earned. We will not stop fighting for Delphi salaried retirees until their pensions are restored.”

Bruce Gump, chairman of the retirees’ association, lauded the bill but noted that the plans’ retirees who passed away since 2009 never received their full benefits.

“In nearly 14 years, we have lost many of them,” Gump said in a statement. “They did not live to see the full pensions they earned. Their surviving spouses and families continue to suffer the effects of the loss of up to 70% of earned and promised pensions.”

He added that “some have called the effort a ‘bailout,’ but the retirees are only asking the Federal government to restore their pensions.”

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Tags: Bill, bipartisan, Claudia Tenney, Dan Kildee, Delphi, Gwen Moore, Legislation, Lump-sum, Mike Turner, Pension, Retirement, Susan Muffley Act

Despite the meme-based antics and political angling, the New York State Teachers’ Retirement System, among many other institutional investors, is likely very satisfied with the completion of the Elon Musk-led takeover of Twitter in the fourth quarter of 2022.

The pension fund held 786,475 shares of Twitter at the end of Q3 and, assuming the fund held shares until the deal finalized at $54.20 per share, freed up $42.63 million to reallocate.

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In addition, the fund raised $15.65 million during Q4 from the October 2022 closing of Berkshire Hathaway Inc.’s acquisition of the Alleghany Corporation in a deal which represented a total equity value of approximately $11.6 billion.

“NYSTRS’ domestic equity portfolio, which is mostly internally managed, is routinely rebalanced to adjust for corporate actions and index changes relative to its policy benchmark, the S&P 1500 index,” a pension system spokesperson emailed regarding the reinvestment of funds.

The target asset allocation of the pension is 29-37% domestic equity, 12-28% international/global equities, 12-20% domestic fixed income, 6-16% real estate equity, 3-13% private equity, 2-10% real estate debt, 0.5-5% private debt, 1-4% cash or equivalents, 0-4% global bonds and 0-3% high-yield bonds.

At the end of Q4 2022, the equity holdings of the fund totaled $40.69 billion across 1,604 holdings, generating a return of 5.79% from the prior period, according to the fund’s most recent 13F-HR filing, for the period ending on December 31, 2022. The strong returns were propelled by the likes of ExxonMobil, JPMorgan Chase, Merck, Chevron, Procter & Gamble, Mastercard, Broadcom and AbbVie, which all returned more than 15% in the quarter, despite each position being marginally trimmed by fund management.

The largest single placement made by the pension system during the quarter was a 298,285-share increase in its position in Arch Capital Group, a Bermuda-based specialty insurer that operates in the reinsurance and mortgage insurance segments on a worldwide basis.

The pension fund increased its stake in the company by 950%; reinsurance and insurance companies are especially valued right now because they capture more revenue from their natural operations when interest rates are higher.

The pension started new positions of at least $1 million in the equities of SJW Group, MasterBrand Inc, Lululemon Athletica, RXO Inc, CubeSmart and Antero Resources.

The five largest equity holdings of the pension system by total value were Apple ($2.292 billion, or 5.63% of the equity portfolio), Microsoft ($2.101 billion, 5.16%), Amazon ($872 million, 2.14%), Berkshire Hathaway Class B ($656 million, 1.61%) and Alphabet ($620 million, 1.52%).