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Senator to block Obama pension insurer nominee over Delphi

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Senator to block Obama pension insurer nominee over Delphi

David Shepardson / Detroit News Washington Bureau

Washington -- An Ohio senator said Tuesday he'll block a confirmation vote on the new head of the government's pension insurer because he objects to how Delphi Corp.'s salaried retirees have been treated.

Sen. Sherrod Brown, D-Ohio, will object to the Senate taking up the nomination of Joshua Gotbaum to be director of the Pension Benefit Guaranty Corp.

Considering nominations usually require unanimous consent and Brown's move could significantly delay action.

"We owe it to Delphi retirees to take all steps possible to secure their pensions," Brown said. "That's why I'm urging the Obama administration to encourage General Motors to meet its obligations to Delphi retirees."

Delphi Corp. terminated its pension plans in July, saddling the PBGC with a $6.7 billion liability for plans covering 70,000 people. Retirees and employees stand to lose $1.2 billion in pension benefits that exceed maximum benefit levels covered by the PBGC. Some will lose up to 70 percent of benefits.

GM opted to spend about $1 billion to cover pension losses by most Delphi hourly retirees. Salaried retirees also lost life insurance and health insurance benefits but no provision was made to cover their pension losses.

GM declined comment Tuesday, as did the U.S. Treasury Department, which gave GM a $50 billion bailout and owns 61 percent of GM.

The Treasury Department allowed GM to use nearly $3 billion of taxpayer funds to help Delphi exit from bankruptcy and let GM reacquire part of its former parts unit.

The PBGC is a government-owned corporation that guarantees basic pension benefits earned by 44 million American workers and retirees participating in over 29,000 private-sector defined benefit pension plans.

It insures the pensions of about 1.5 million people in Michigan, and has been without an Obama administration appointee at the helm for nearly 16 months.

Because Gotbaum has done consulting work for Elliott Management Corp., one of the major owners of post-bankruptcy Delphi, on its investment, Brown, who represents thousands of Delphi retirees, has questioned why Gotbaum should win confirmation since he can't deal with Delphi.

"Why should we confirm you if you are taking yourself out of something so important?" he asked.

From The Detroit News: http://www.detnews.com/article/20100512/AUTO01/5120332/1148/auto01/Senator-to-block-Obama-pension-insurer-nominee-over-Delphi#ixzz0niccAgbO

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