HR 6929 Susan Muffley Act passes House. AVAYA NOT included

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HR 6929 Susan Muffley Act passes House. AVAYA NOT included

Postby remberger » Thu Jul 28, 2022 9:20 am

HR 6929 Susan Muffley Act passes House. It provides management pension relief to Delphi (formerly GM) pensioners whose pensioned were capped by the PBGC. It is specific to Delphi ONLY, even thought Avaya retirees circumstances are identical.

This is the kind of bill that could easily sneak into the Manchin/Schumer reconciliation bill now or the next budget omnibus bill in September.

I suggest you call your senators at their DC offices and ask
(1) Modify S3766 (HR6929) Susan Muffley Act to include Avaya retirees
(2) Include language to prevent future retirees from getting into this position by requiring that anytime a corporation undergoes change of ownership (like Avaya going private) that pension obligations take a senior position to all future financing.

Letters may help, but since this could move very quickly, a call is preferable. I talked to staffers at (PA) Senator Pat Toomey's DC office and Rep Susan Wild's DC office. I left a voice mail with (PA) Senator Bob Casey, but intend to follow up with a live call.

Bob Emberger
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Re: HR 6929 Susan Muffley Act passes House. AVAYA NOT includ

Postby wrshelton » Sun Jul 31, 2022 7:35 pm

I want to understand this a little more. Are we trying to prevent our pensions from be cut? Or are we trying to get a so called cost of living raise? I've been retired over 20 years and my pension has been the same. I also took a hit when they stopped my supplemental pension when Avaya went bankrupt. Is that what the cap means - that we won't ever get an increase or does it mean they can cap our current pensions at a lower amount?

Please explain.
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Re: HR 6929 Susan Muffley Act passes House. AVAYA NOT includ

Postby remberger » Tue Aug 02, 2022 3:35 pm

WR – I hope I can clear up some of your confusion.

First and foremost, there is no risk to our PBGC pensions at the current time. [Caveat, like Social Security, PBGC pensions come from a pot of money. If the pot runs out, the pensions could be cut. This is an EXTREMELY UNLIKELY, but non-zero possibility. The pot is well funded. Multiple bankrupt company retirees pull from the pot (like Delphi). It would be political suicide for Congress to let the pot run dry]

Second, this is not about Cost of Living raises. That ship sailed a long time ago.

When Avaya filed for bankruptcy, the PBGC assumed responsibility for our “qualified” management pensions. For each retiree, there was a cap on the amount of the qualified pension that the PBGC assumed (based on age and years of service as I recall). Some retiree’s qualified pensions exceeded the PBGC cap. They lost anything over the cap and were not even able to claim the loss as a liability for Avaya to pay at $0.20 on the dollar. This is directly on point with the Delphi case.

In addition, many of us had “non-qualified” pensions which I believe you are calling your supplemental pension. Avaya calculated to value of that pension (using their formula) and paid us a small lump sum for a portion of its calculated value.

If you see the post I received from Senator Casey (D-PA), if this is taken up, it will be taken up by the Senate Budget committee. If you read between the lines, you can see that items like this tend to get hidden in a larger bill, rather than as a stand alone bill. He referred to the Butch Lewis Emergency Pension Plan Relief Act (for union pensions tied to multiple employers, like the Teamsters) being part of the American Rescue Plan Act. This is the kind of thing that could get hidden in the Joe Manchin/Chuck Schumer budget reconciliation proposal (for this fiscal year), or an omnibus funding bill such as one that must be passed by September 30 for the next fiscal year.

What I am asking of my Senators and Representative are, to the extent that they consider Delphi retirees, they also consider Avaya retirees. Specifically:

(1) To the extent that an Avaya management employee has their qualified pension capped when the PBGC assumed the pension, they should be included in the bill.
(2) Ideally, it would be great if our non-qualified pensions received the same treatment as the portion of the qualified pensions that exceeded the cap. From my perspective, the only difference is timing. The qualified/non-qualified split was determined based on PBGC rules at the time of our retirement. The uncapped/capped split was determined based on PBGC rules at the time of bankruptcy
(3) Legislation should address the root cause of the problems so that retires of the next bankrupt company do not suffer the same issues. Specifically, (a) non-qualified pension debt should become senior debt at the time a company is taken private or sold. (b) qualified pensions in excess of the PBGC cap should remain company liabilities with the same seniority as non-qualified pensions. (c) The value of non-qualified pensions should be calculated using the same formula that the PBGC uses for qualified pensions (this was another area where we were shortchanged).

I hope this helps.

Bob Emberger
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