Senate Vote on Delphi Pensions: Eligibility, Payments, and Taxes

Delphi salaried retirees are getting their pensions restored under a provision Congress attached to the Consolidated Appropriations Act, 2023, signed into law on December 29, 2022. The Pension Benefit Guaranty Corporation is directed to pay each affected retiree the full vested benefit originally promised under the Delphi plan, plus a lump sum covering the shortfall between what was paid and what was owed since the plans terminated on July 31, 2009, with 6 percent interest added. Follow-on legislation in the 119th Congress, H.R. 1895, fills in the mechanics for the lump sum, the interest calculation, and how the payment is taxed.¹

Why the Cuts Happened

Delphi Corporation spun off from General Motors in 1999. When Delphi moved toward liquidation in bankruptcy, the PBGC terminated and took over all six of its pension plans, effective July 31, 2009.² Roughly 70,000 workers and retirees were affected across the six plans. The PBGC could only guarantee benefits up to statutory maximums, and for many salaried employees those limits fell well below what Delphi had promised.³ Some salaried retirees reportedly saw their monthly checks drop by more than half. Hourly retirees, by contrast, kept their full pensions because GM had a 1999 agreement to top up their benefits if the Delphi plan ever terminated. No equivalent agreement existed on the salaried side.

How Restoration Became Law

Standalone bills to restore the salaried pensions stalled in Congress for years. The House passed the Susan Muffley Act (H.R. 6929) in July 2022. The Senate never held a standalone vote on it. Instead, the restoration language was folded into the omnibus Consolidated Appropriations Act, 2023, which both chambers passed and the President signed on December 29, 2022. Attaching it to must-pass government funding legislation was the mechanism that finally got it enacted.

In the 119th Congress, H.R. 1895, the Delphi Retirees Pension Restoration Act, was introduced in 2025 with detailed provisions on how the lump sum is computed, the 6 percent interest rate on past-due amounts, and a three-year income-spreading election for tax purposes.¹

Who Qualifies

The restoration covers non-union, salaried retirees and their beneficiaries whose benefits were reduced after the PBGC took over the Delphi plans in 2009. Participants in the Delphi Retirement Program for Salaried Employees are the primary group. Surviving spouses and other beneficiaries receiving reduced survivor benefits also qualify. The law directs the PBGC to pay the full vested benefit each person had accrued under the original Delphi plan, overriding the agency’s normal guarantee limits.

How Restored Payments Are Calculated

There are two pieces to the money.

The first is a lump sum covering every dollar of benefits lost between the July 31, 2009 termination date and the date the PBGC recalculates the individual’s benefit. The PBGC subtracts what was already paid, so the lump sum represents the net shortfall. On top of that shortfall, the PBGC adds interest at a 6 percent annual rate, applied to each month’s underpayment from the time it was due until the recalculation.¹ For someone who was underpaid for fourteen-plus years, the interest component can be substantial.

The second piece is the ongoing monthly benefit. After the recalculation, the PBGC pays the full restored amount each month going forward, replacing the previously reduced check.

Taxes on the Lump Sum

A lump sum covering more than a decade of back benefits plus interest can push a retiree into a higher tax bracket in a single year. The legislation addresses this with a three-year income-spreading election. Unless the recipient opts out, the lump-sum amount is included in gross income ratably over three tax years, beginning with the year the payment is received.¹

If the retiree dies before the three-year period ends, any remaining untaxed portion is included in income for the year of death. A surviving spouse receiving a PBGC survivor benefit can elect to continue the three-year spread and pick up the deceased retiree’s remaining installments in the corresponding tax years, rather than accelerating the full amount into the year of death.¹

Talk to a tax professional before the payment arrives. Even with three-year spreading, the extra income may affect state income tax and other tax-sensitive calculations.

Medicare Premiums and Social Security

Medicare Part B and Part D premiums include an income-related monthly adjustment amount (IRMAA) for higher earners. The Social Security Administration determines IRMAA using modified adjusted gross income from two years prior. A large restoration payment in one year can raise your reported income above an IRMAA threshold two years later, triggering surcharges for both Part B and Part D. Even one dollar over the threshold triggers the surcharge for the full year. The three-year spreading election helps distribute the taxable income. Retirees who still land above a bracket may be able to request a reconsideration from the SSA using Form SSA-44, which allows you to report a life-changing event that reduced your income. Whether a one-time pension restoration qualifies depends on the specific circumstances, so contact the SSA before the surcharge takes effect.

Social Security’s earnings test is a separate concern. Retirees collecting Social Security before full retirement age lose $1 in benefits for every $2 earned above $24,480 in 2026, or $1 for every $3 above $65,160 in the year they reach full retirement age.⁴ Pension income is generally not “earnings” for this test, which applies to wages and self-employment income. A restoration lump sum should not trigger an earnings-test reduction. If you get a notice suggesting otherwise, call the SSA to clarify what the payment is.

Payment Status and Contacting the PBGC

The PBGC is the agency recalculating benefits and issuing restoration payments. Recomputing individual benefits for more than 20,000 participants is a large administrative task. Each retiree’s benefit must be reworked using the original plan formula, the PBGC payment history, and the applicable interest. The PBGC has communicated with affected retirees, but detailed public timelines for completion have not been widely published.

If you are a Delphi salaried retiree or beneficiary and have not heard from the PBGC about your restoration, call the PBGC Customer Contact Center at 1-800-400-7242, Monday through Friday, 8:00 a.m. to 7:00 p.m. Eastern Time (except federal holidays).⁵ Have your Social Security number and PBGC plan number ready; the plan number is printed in the upper right corner of any PBGC correspondence.

Appealing a Benefit Calculation

If you get your benefit determination and believe the PBGC made an error, you have 45 calendar days from the date of the determination to file a written appeal.⁶ If the 45th day is a weekend or federal holiday, the deadline moves to the next business day. Before filing, consider calling the Customer Contact Center at 1-800-400-7242 to ask how your benefit was calculated. A miscommunication about the numbers may not need a formal process.

If you do appeal, the submission must be in writing and clearly marked as an appeal. Include:

Your name, address, PBGC Customer ID number, the plan name, and the case number from the top of your benefit determination.
A specific explanation of why you believe the calculation is wrong and what result you think is correct.
Supporting documents, such as records, pay stubs, or plan documents that back up your position.

Send appeals to PBGC, ATTN: Appeals Board, P.O. Box 151750, Alexandria, VA 22315-1750, by fax to 202-229-4095, or by email to appeals@pbgc.gov.⁶ You don’t need an attorney, though you may designate a representative using PBGC Form 715 or a notarized power of attorney. If you need more time to gather documentation, submit a written extension request within the same 45-day window, which pauses the clock. For unresolved service issues after repeated contact with the agency, email the PBGC Problem Resolution Officer for Participants at participant.pro@pbgc.gov.⁵

1
Congress.gov. H.R.1895 – 119th Congress (2025-2026) Delphi Retirees Pension Restoration Act
2
Pension Benefit Guaranty Corporation. Delphi Corporation Plan History
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Pension Benefit Guaranty Corporation. Delphi Historical FAQs
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Social Security Administration. Special Payments After Retirement
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Pension Benefit Guaranty Corporation. Contact Us
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Pension Benefit Guaranty Corporation. Your Right to Appeal