Republicans are stepping up the pressure on the Obama administration
to explain why a federal pension insurer slashed the pensions of
non-union employees as part of the General Motors (GM) bailout even
though union benefits were preserved.
For the past three years, four House Committees—Oversight, Education & Workforce, Financial Services, and Ways and Means—have been digging into the Pension Benefit Guarantee Corporation (PBGC)’s decision to slash the pensions for 20,000 non-union Delphi employees by up to 70 percent. They have received little cooperation from the Obama administration, which championed the $50 billion GM bailout.
While the PBGC, an independent backstop for failing pension systems akin to the FDIC’s protection for bank customers, has released more than 60,000 documents relating to the bailout to the committees, the Treasury Department and White House counsel have stonewalled, according to Ways and Means Chairman Dave Camp (R., Mich.).
“The PBGC has been forthcoming, but their documents raise more questions than they answer,” Camp told the Washington Free Beacon. “They show that the Treasury Department’s auto [bailout] task force was in constant communication with the PBGC, but we’re missing Treasury’s half of these email chains; they have not owned up to them.”
The controversy dates back to 2005 when Delphi, a parts supplier to GM, entered bankruptcy after failing to renegotiate pension benefits. It was mired in Chapter 11 until 2009 when the Treasury recognized that GM could not emerge from bankruptcy without Delphi. In order to speed up the process, Delphi liquidated its $6.2 billion retirement funds into the PBGC. It then slashed non-union benefits by up to 70 percent, while spinning off the union plans to GM. The bailed out automaker pledged to kick in $1 billion to preserve the union benefits in full despite the fact that it had no legal obligations to do so.
Read more: http://freebeacon.com/the-delphi-oracle/
For the past three years, four House Committees—Oversight, Education & Workforce, Financial Services, and Ways and Means—have been digging into the Pension Benefit Guarantee Corporation (PBGC)’s decision to slash the pensions for 20,000 non-union Delphi employees by up to 70 percent. They have received little cooperation from the Obama administration, which championed the $50 billion GM bailout.
While the PBGC, an independent backstop for failing pension systems akin to the FDIC’s protection for bank customers, has released more than 60,000 documents relating to the bailout to the committees, the Treasury Department and White House counsel have stonewalled, according to Ways and Means Chairman Dave Camp (R., Mich.).
“The PBGC has been forthcoming, but their documents raise more questions than they answer,” Camp told the Washington Free Beacon. “They show that the Treasury Department’s auto [bailout] task force was in constant communication with the PBGC, but we’re missing Treasury’s half of these email chains; they have not owned up to them.”
The controversy dates back to 2005 when Delphi, a parts supplier to GM, entered bankruptcy after failing to renegotiate pension benefits. It was mired in Chapter 11 until 2009 when the Treasury recognized that GM could not emerge from bankruptcy without Delphi. In order to speed up the process, Delphi liquidated its $6.2 billion retirement funds into the PBGC. It then slashed non-union benefits by up to 70 percent, while spinning off the union plans to GM. The bailed out automaker pledged to kick in $1 billion to preserve the union benefits in full despite the fact that it had no legal obligations to do so.
Read more: http://freebeacon.com/the-delphi-oracle/
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