Susan Muffley Act Bypasses Pension Caps for Delphi Retirees, Mandates Catch-Up Payments with 6% Interest

The Susan Muffley Act of 2025 is a targeted piece of legislation designed to fix a specific problem for retirees in several named pension plans, most notably the Delphi Hourly-Rate Employees Pension Plan. Simply put, this Act forces the Pension Benefit Guaranty Corporation (PBGC) to ignore the standard federal caps on guaranteed benefits for these plans and pay affected participants their full vested plan benefit—the amount they actually earned.

The Cap Problem and the Fix

When a large pension plan fails and is taken over by the PBGC, there are federal limits on how much the PBGC can guarantee. This often means retirees end up receiving less than the full benefit they were promised and earned. This Act specifically targets that shortfall for participants in plans like the Delphi Hourly-Rate Employees and Salaried Employees plans, among others. The bill directs the PBGC to calculate benefits without applying the standard "phase-in limit" and the "maximum guaranteed benefit limit" (Section 2).

Back Pay and Interest: The Retroactive Relief

This isn't just about future payments; it’s about making up for years of underpayment. If you are an eligible participant and your benefit was calculated before this law passed, the PBGC must recalculate your monthly payment to the new, higher standard immediately. More importantly, the PBGC must issue a lump-sum catch-up payment within 180 days of the law’s enactment. This payment covers the difference between what you were paid and what you should have been paid since your plan terminated. To sweeten the deal, the PBGC must add interest to this lump sum, calculated at a significant 6% annual rate to compensate for the delay.

For an eligible retiree who has been receiving payments for years, this lump sum could represent a substantial financial correction, finally delivering the pension security they worked for. Think of it as the government finally paying back a loan they didn't realize they took out, complete with a decent interest rate.

Who Gets the Boost and Who Doesn't

The Act explicitly names six plans, including the two major Delphi plans (Hourly-Rate and Salaried), the PHI Non-Bargaining, ASEC Manufacturing, PHI Bargaining, and Delphi Mechatronic Systems Retirement Programs. If you are currently receiving or eligible for future payments from one of these, you qualify for the recalculation, provided your total payments haven't already hit your full vested benefit.

However, there is one key exclusion that retirees need to watch out for: The Act explicitly states that if you were covered by the 1999 agreements between General Motors and unions that provided a “top-up” benefit to certain hourly employees who moved from the GM pension plan to the Delphi Hourly-Rate Employees Pension Plan, you are not eligible for this recalculation. This exclusion creates two tiers of Delphi retirees, which may seem arbitrary to those left out.

The Funding Mechanism

Fixing these underpayments isn't cheap, so the bill sets up a dedicated funding stream. A new account called the Delphi Full Vested Plan Benefit Trust Fund is established in the Treasury. Crucially, Congress is mandated to appropriate "whatever money is necessary" to cover these increased benefit payments and the PBGC’s administrative costs. This means the money to pay these enhanced benefits comes directly from the Treasury, ensuring the PBGC’s broader insurance fund remains stable while these specific obligations are met.