Delphi Retirees Pension Restoration Act
- Bill Number
- H.R. 1895
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Labor and Employment
- Status
- Introduced
- Latest Action
- 2025-03-06: Referred to the Committee on Education and Workforce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- Last Updated
- 2025-10-07T08:05:29Z
AI-Generated Summary
Purpose of the Legislation
The Delphi Retirees Pension Restoration Act aims to enhance pension benefits for retirees and beneficiaries affected by the termination of specific pension plans linked to Delphi Corporation (a former auto parts manufacturer). It increases the level of benefits guaranteed by the Pension Benefit Guaranty Corporation (PBGC), a federal agency that insures private-sector defined benefit pension plans under the Employee Retirement Income Security Act (ERISA). The goal is to provide fuller restoration of vested (earned and non-forfeitable) pension benefits that were previously limited by ERISA's guarantee caps.
Key Provisions
- Increased Guaranteed Benefits: For eligible participants and beneficiaries in six specified "covered plans" (e.g., Delphi Hourly-Rate Employees Pension Plan, Delphi Retirement Program for Salaried Employees), the PBGC must guarantee the full vested plan benefit. This is the monthly amount participants would have received at plan termination if ERISA's phase-in limits (gradual increase over time) and maximum guarantee caps were ignored.
- Recalculation and Adjustments: The PBGC must recalculate benefits for those already receiving payments, adjust future monthly payments upward as soon as possible after enactment, and issue lump-sum payments within 180 days for past underpayments. These lump sums include 6% annual interest on the shortfall.
- Eligibility Criteria:
- Participants or beneficiaries in pay status or eligible for future payments as of enactment.
- Those whose prior PBGC payments did not exceed the full vested benefit.
- Excludes individuals covered by 1999 agreements between General Motors and unions providing supplemental "top-up" benefits.
- Funding Source: Costs for increased benefits and PBGC administrative expenses come from the unobligated balance in the PBGC's basic benefits fund (under ERISA Section 4005).
- Tax Treatment of Lump Sums: Recipients can elect to spread the lump-sum payment over three taxable years to ease tax burden. Special rules apply if the recipient dies during this period, including options for surviving spouses to continue the spread.
- Administrative Oversight: PBGC determinations are subject to its standard review process. The PBGC, in consultation with the Treasury and Labor Departments, can issue regulations to implement the changes.
- No Retroactive Asset Changes: Prior PBGC decisions on plan asset allocation and recoveries remain unchanged.
Significant Changes to Existing Law
- Overrides ERISA Limits: Amends ERISA Section 4022 by effectively waiving the phase-in period (which limits guarantees for recent benefit accruals) and the maximum monthly benefit cap (currently around $7,000, adjusted annually) specifically for these covered plans. This ensures guarantees match the full vested amount without those restrictions.
- Updates PBGC Funding Rules: Modifies ERISA Section 4005(b)(2)(A) to explicitly include these enhanced guarantees as part of "basic benefits," allowing use of the basic benefits fund without needing new appropriations.
- Introduces Retroactive Relief: Mandates recalculation and lump-sum payments for past benefits, which is not standard under current PBGC practices that apply guarantees prospectively after plan termination.
Potential Impacts
- On Government Agencies: The PBGC faces immediate increased liabilities (estimated costs not specified in the bill but drawn from existing funds), potentially straining its resources and requiring adjustments to premiums paid by employers with pension plans. Treasury and Labor Departments provide consultation but no direct funding.
- On Citizens: Provides financial relief to thousands of Delphi retirees (primarily former auto workers) by boosting monthly pensions and delivering back payments, improving retirement security for this group. However, it could indirectly affect other pension holders if PBGC fund balances lead to higher premiums industry-wide.
- On International Relations: No direct impact, as the bill focuses on domestic U.S. pension insurance for plans tied to a U.S.-based company.
Main Stakeholders Affected
- Primary Beneficiaries: Eligible retirees and surviving spouses from the six covered Delphi-related plans, who stand to gain higher guaranteed pensions and lump-sum compensation for prior shortfalls.
- PBGC and Federal Agencies: The PBGC bears the administrative and financial burden; Treasury handles tax aspects; Labor Department advises on implementation.
- Employers and Unions: Indirectly affected through potential PBGC premium increases; excludes those under specific GM-union agreements, limiting scope to non-supplemented Delphi workers.
- Taxpayers: Minor fiscal impact via PBGC's self-funded operations, but no new taxes or appropriations required.
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens ERISA's pension insurance framework by creating a targeted exception, potentially setting a precedent for similar relief in future plan terminations (e.g., in distressed industries like manufacturing). Ensures administrative fairness through PBGC's review process but may invite legal challenges if fund usage is contested as exceeding ERISA's intent.
- Constitutional: No apparent issues; aligns with Congress's authority to regulate interstate commerce and employee benefits under the Commerce Clause.
- Political: Represents bipartisan support (introduced by a diverse group of representatives) for worker protections in the auto sector, highlighting ongoing concerns about pension shortfalls from corporate bankruptcies (Delphi's 2005 bankruptcy affected ~50,000 retirees). Could influence broader pension reform debates, emphasizing ad-hoc fixes over systemic changes, and may face scrutiny over costs amid federal budget pressures.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Spartz, Victoria [R-IN-5]
Cosponsors (19)
Rep. Turner, Michael R. [R-OH-10], Rep. Rulli, Michael A. [R-OH-6], Rep. Scott, Austin [R-GA-8], Rep. Langworthy, Nicholas A. [R-NY-23], Rep. Thanedar, Shri [D-MI-13], Rep. Tlaib, Rashida [D-MI-12], Rep. Tenney, Claudia [R-NY-24], Rep. Stutzman, Marlin A. [R-IN-3], Rep. LaMalfa, Doug [R-CA-1], Rep. Wilson, Joe [R-SC-2], Rep. Hamadeh, Abraham [R-AZ-8], Rep. Kaptur, Marcy [D-OH-9], Rep. Carson, André [D-IN-7], Rep. Davidson, Warren [R-OH-8], Rep. Taylor, David J. [R-OH-2], Rep. Stevens, Haley M. [D-MI-11], Rep. McDonald Rivet, Kristen [D-MI-8], Rep. Kelly, Mike [R-PA-16], Rep. Barrett, Tom [R-MI-7]
Recent Actions
- 2025-03-06: Referred to the Committee on Education and Workforce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-03-06: Referred to the Committee on Education and Workforce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-03-06: Introduced in House
- 2025-03-06: Introduced in House
Bill Versions
- Delphi Retirees Pension Restoration Act — issued 2025-03-06 — PDF (10 pages)