Press Release
The Delphi Salaried Retiree Association’s 1114 Committee has reached a tentative agreement with Delphi Corp. for $8.75 million in subsidy payments for the benefit of salaried retirees. Delphi is making a motion to settle the appeal filed by DSRA in the Bankruptcy Court today. The settlement must be approved by Delphi’s creditors and the bankruptcy court.
A hardship fund would be established to subsidize retiree medical cost benefits. The hardship fund will help salaried retirees and their survivors who suffer special hardships from the termination of their benefits to obtain medical and prescription subsidies.
In addition, the settlement allows for set up costs for DSRA to start a Voluntary Employees’ Benefit Association (VEBA). The VEBA would be positioned to allow retirees to take advantage of the Health Care Tax Credit (HCTC) available through the American Recovery and Reinvestment Act in the event the pensions are turned over to the Pension Benefit Guarantee Corporation. VEBA plans are a tax-free health reimbursement arrangement where tax-free funds can be used to pay or reimburse eligible out-of-pocket health care costs and premiums.
The settlement will also allow base subsidies to allow a national health care program to be established by DSRA independent of Delphi. This will allow DSRA retirees to move to a national healthcare program that will qualify for the HCTC.
“We are hopeful that we can provide affordable healthcare coverage under a national program at a lower cost than the Delphi self-payment costs,” said James Frost, chairman of the 1114 Committee.
The 1114 Committee was formed as part of a bankruptcy judge’s ruling on February 24 allowing Delphi Corp. provisional permission to continue termination of healthcare and life insurance coverage for all of its current and future retirees. The judge verified on March 11 that Delphi could terminate salaried benefits.
“We have done the best job possible with limited leverage and time,” Frost said. “We are hopeful that this settlement will be the first step to providing DSRA healthcare coverage for our members.”
Delphi retirees on the 1114 committee include: James R. Frost of East Amherst, N.Y, James A. Hagenbach, Lockport, N.Y.; James Sumpter, Noblesville, IN; James R. Conger, Saginaw, MI; W. Ben Gifford, Kokomo, IN; Cathy Carol, Wichita Falls, TX and Robert Todd Nicholson, Marion, IN.
DSRA Organized to Fight Delphi’s Decision to Terminate Benefits
DSRA was organized in mid-February after Delphi filed the motion in the bankruptcy court to terminate retiree benefits. The association’s goals are to take legal action to achieve the best possible outcome on the termination of healthcare and life insurance benefits and to protect pensions for salaried employees. In addition, the group is joining with other automotive salaried associations including GM, Ford and Chrysler who are working on similar goals.
Approximately 4,200 Delphi retirees have joined the DSRA with more joining each day in an attempt to organize to save their retirement benefits. Delphi retirees can join the group by going to the DSRA web site at www.delphisalariedretirees.org and get additional information on where to send documentation for the 1114 committee.
The largest concentration of the 15,000 Delphi retirees is located in Indiana, Michigan, Ohio and New York with others scattered throughout the U.S.
DSRA has also started a legal defense fund to finance its legal efforts. Donations should be made payable to DSRA, Inc., and sent to DSRA, Inc., P.O Box 64, Carmel, Indiana, 46082-0064. DSRA, Inc. is a non-profit organization.
Delphi Corp., a large supplier of automotive components filed for Chapter 11 bankruptcy in October of 2005. The company was a GM operating unit before its spin-off in 1999. The majority of the retirees impacted started their careers at GM which is still Delphi’s largest customer. In the court hearings on February 24, it was confirmed that GM and Delphi are in talks regarding GM taking over certain Delphi plants to continue its operations. GM has stated in its restructuring plan to the federal government that it will not take on any liabilities for Delphi employees or retirees.
The Delphi motion can be obtained here.
Source: Delphi Salaried Retirees Association
