The Susan Muffley Act of 2025 ensures full pension benefits for eligible participants and beneficiaries under specific terminated pension plans, recalculating benefits, providing lump-sum payments for past-due amounts, and establishing a trust fund to cover increased benefit payments.
Michael Turner
Representative
OH-10
The Susan Muffley Act of 2025 ensures that eligible participants and beneficiaries under specific pension plans, like the Delphi and PHI retirement programs, receive their full vested benefits. It directs the Pension Benefit Guaranty Corporation (PBGC) to recalculate benefits, provide lump-sum payments for past-due amounts with interest, and establishes a trust fund within the Treasury to cover these increased payments. The act also includes provisions for the tax treatment of lump-sum payments, allowing recipients to spread the income over three years unless they elect otherwise.
Susan Muffley Act Guarantees Full Pensions for Delphi, PHI Retirees: Retroactive Payments Coming
The Susan Muffley Act of 2025 is stepping in to fix a major pension problem for former employees of Delphi and PHI. This bill makes sure that eligible retirees and beneficiaries get the full vested pension benefits they were promised, even if the plan terminated. This isn't just about future payments – it's going back and making things right.
Retroactive Relief
The core of the bill is about correcting past underpayments. The Pension Benefit Guaranty Corporation (PBGC) will recalculate benefits for eligible participants and beneficiaries under several covered plans (SEC. 2). These plans include the Delphi Hourly-Rate Employees Pension Plan, the Delphi Retirement Program for Salaried Employees, and several PHI plans. If you were getting less than your full vested benefit, the PBGC will adjust your future payments. But that's not all: the bill mandates a lump-sum payment within 180 days of enactment to cover all past-due benefits, plus a 6% annual interest to make up for lost time (SEC. 2). For example, if a Delphi worker was shorted $100 a month for five years, they're not just getting that $6,000 back – they're getting an extra amount to compensate for the fact they didn't have that money when they needed it.
Cash in Hand, Tax Relief
That lump-sum payment? The bill addresses how it's taxed. You won't get hit with the entire tax burden in one year. Instead, it's spread out over three years, unless you choose otherwise (SEC. 2). This is a big deal – it avoids a sudden, massive tax bill on money that's essentially making up for past losses. There are also special provisions for surviving spouses, ensuring they can also benefit from these corrected payments (SEC. 2).
Funding the Fix
To make all this happen, the bill creates the "Delphi Full Vested Plan Benefit Trust Fund" within the U.S. Treasury (SEC. 2). This isn't just an empty promise – the bill specifically appropriates funds from the general fund to cover the increased benefits and the costs of administering the whole process (SEC. 2). This means there's actual money set aside to make these payments and ensure the PBGC can handle the workload. The bill also allows the PBGC, along with the Treasury and Labor Departments, to create regulations to implement these changes, providing a framework for how this will all work in practice (SEC. 2).