Senator Sherrod Brown

WASHINGTON, D.C. – U.S. Sen. Sherrod Brown (D-OH) today attended a hearing of the Senate Health, Education, Labor and Pensions (HELP) Committee entitled, “Pensions in Peril: Helping Workers Preserve Retirement Security through a Recession.” Brown requested that the hearing be held so the committee could examine issues affecting Delphi workers and other retirees who risk losing their pensions.

“I would like to welcome the witnesses and thank them for their testimony. I am especially pleased to welcome Mr. Bruce Gump from Warren, Ohio who is representing the Delphi salaried retirees and Congressman Tim Ryan who represents many Delphi retirees who live in the Youngstown area of Ohio.

Our pension system, which has been one of the building blocks of retirement security for millions of Americans, is on shaky ground. The economic crisis, coupled with much lower than anticipated rates of return on investment portfolios, is pushing many pension plans into the danger zone.

For many workers and retirees in Ohio and across the nation, there is a crisis of confidence in our social contract. Pension benefits earned over a lifetime of service are dramatically reduced in the wake of bankruptcy. When PBGC assumes trusteeship of a pension plan, it can only pay benefits up to what is guaranteed by law. Final benefits can sometimes take months or years to calculate, with the retiree responsible for any overpayment.

Early retirement, supplemental benefits, and health benefits are not guaranteed. Retirees are in no position to make up for these losses when their pension is assigned to the PBGC. They feel betrayed by the system that was supposed to protect them.

Let me share with you a few examples from Ohio.

When Richard was working for Republic Technologies, he was told that he would get a monthly pension benefit of about $2,400. When PBGC assumed trusteeship of the plan, he was told that he would get a benefit of $1,088.27. Later, after PBGC calculated his final benefit, he was told that he had been overpaid and that he owed more than $53,000. His actual benefit would be $325.19 minus a recoupment deduction of 10 percent, yielding $292.67 before taxes.

Dorthea worked as a Packard/GM/Delphi hourly employee for 34 years. In her letter to our office asking for assistance, she wrote, “To sum up my feelings, I was afraid to die; now I am afraid to live. No pension, no health care, no social security, no jobs, etc... Please help!”

John, a 55-year old Delphi Salaried retiree wrote, “Thirty-one years of effort to secure a pension are being ruined. In the bankruptcy court, creditors who only have several years of revenue at risk are being given higher priority. I have been looking for a job for 10 months without any success. If my pension goes to the PBGC, my family will probably be living below the poverty level.”

In the case of Delphi hourly employees under certain collective bargaining agreements, GM agreed to make up the difference between the PBGC benefit and what the retiree had earned. The Delphi salaried employees and some of the hourly employees such as those represented by the International Union of Operating Engineers, the International Brotherhood of Electrical Workers (IBEW), and the Machinists unions had no such agreement and are facing drastic reductions in their pension benefits. They are looking for fair treatment.

Other Delphi retirees are facing the loss of their health benefits, which is why Congressman Ryan and I introduced legislation to fund a Voluntary Employees’ Beneficiary Association to help them with the cost of health care. They, too, are looking for fair treatment.

I look forward to hearing the witnesses’ testimony and to working with my colleagues to strengthen and secure our defined benefit pension system so that all retirees receive the full pensions that they have earned.

The hearing also featured testimony from Bruce Gump, of Warren, Ohio. Gump is chairman of the Delphi Salaried Retirees Association.

Brown has met with Delphi retirees and helped facilitate a meeting with President Obama’s Director of Recovery for Auto Communities and Workers, Dr. Ed Montgomery. He is the author of legislation that would provide funding for health care for Delphi retirees who lost their health coverage due to General Motors’ Chapter 11 bankruptcy filing. The bill would create a Voluntary Employees Beneficiary Association (VEBA) to provide health coverage to hourly workers in the IUE-CWA, IAM, USW, and other unions along with salaried Delphi retirees.