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Auditors Probe U.S. Role in GM Funding of Delphi Pension Plan

January 27, 2011
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Related Topics: Finance/Taxes, Benefit Design and Communication, Retirement/Pensions, Latest News
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Federal auditors said they are looking at whether the Obama administration pressured General Motors Co. to provide additional funding for Delphi Corp.’s pension plan for hourly workers.

The audit focuses on GM’s decision after its 2009 bankruptcy to add to Pension Benefit Guaranty Corp. benefits for Delphi hourly workers without doing the same for salaried retirees.

Neil Barofsky, the special inspector general overseeing the $700 billion federal bailout of financial institutions and the auto sector, reported the audit on Jan. 26 in his quarterly report to Congress.

A number of congressmen led by Rep. Christopher Lee, R-N.Y., have questioned whether political considerations played a role in GM’s decision on behalf of hourly retirees.

Barofsky, a former federal prosecutor who also is conducting an investigation of possible illegal conduct by GM and Chrysler Group in their dealer reductions, didn’t say when his audits would be completed.

In June 2009, Lee and more than 20 other lawmakers wrote to Treasury secretary Timothy Geithner to complain that 15,000 salaried Delphi retirees may have their pensions cut by as much as 70 percent.

“It is fundamentally unfair that two groups of retirees from the same company, who worked side-by-side for so many years and who are faced with the same unfortunate situation, are being treated so differently by the federal government,” the letter said.  

Filed by Neil Roland of Automotive News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

 

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