H.R.1357 - Susan Muffley Act of 2025 (119th Congress)
Summary
H.R.1357, the Susan Muffley Act of 2025, aims to increase the pension benefits guaranteed to eligible participants and beneficiaries of specific pension plans that were terminated, including those related to Delphi and PHI. The bill mandates recalculation of benefits to ensure they reflect the full vested plan benefit, and it establishes a trust fund within the Treasury to cover the costs of these increased benefits and related administrative expenses.
It also addresses the tax treatment of lump-sum payments made to beneficiaries as a result of the recalculation, allowing recipients to spread the income inclusion over three years unless they elect otherwise. The bill directs the Pension Benefit Guaranty Corporation (PBGC), in consultation with the Secretaries of Treasury and Labor, to implement the provisions and issue necessary regulations.
The bill specifies that any determination made by the corporation under this section concerning a recalculation of benefits or lump-sum payment of past-due benefits shall be subject to administrative review by the corporation.
Expected Effects
The bill will result in increased pension payments to eligible participants and beneficiaries of the specified pension plans. It will also require the PBGC to recalculate benefits and make lump-sum payments to cover past underpayments.
The establishment of the Delphi Full Vested Plan Benefit Trust Fund will provide a dedicated source of funding for these increased benefits. The tax provisions aim to ease the tax burden on recipients of the lump-sum payments.
Potential Benefits
- Increased Pension Benefits: Eligible participants and beneficiaries will receive higher monthly pension payments, reflecting their full vested plan benefits.
- Lump-Sum Payments: Recipients will receive lump-sum payments to compensate for past underpayments, with an additional amount to account for foregone interest.
- Tax Relief: The bill allows recipients to spread the income from the lump-sum payments over three years, potentially reducing their tax liability.
- Dedicated Funding: The establishment of a trust fund ensures that there are dedicated resources to cover the increased pension benefits.
- Administrative Review: The bill provides for administrative review of PBGC determinations, ensuring fairness and accuracy in the recalculation and payment of benefits.
Potential Disadvantages
- Potential for Increased Government Spending: The establishment of the trust fund and the payment of increased benefits will require additional government spending, potentially increasing the national debt.
- Complexity of Implementation: Recalculating benefits and making lump-sum payments could be administratively complex and time-consuming for the PBGC.
- Potential for Disputes: Despite the administrative review process, there could still be disputes over the recalculation of benefits and the amount of lump-sum payments.
- Limited Scope: The bill only applies to specific pension plans, potentially creating a sense of unfairness among those whose pension plans are not covered.
- Uncertainty of Long-Term Funding: The bill relies on appropriations from the general fund, which could be subject to change in the future, potentially jeopardizing the long-term funding of the increased benefits.
Most Disadvantaged Areas:
Constitutional Alignment
The bill appears to align with the General Welfare Clause of the Constitution (Preamble), as it aims to provide economic security to retirees who were affected by pension plan terminations. The establishment of a trust fund and the appropriation of funds for increased benefits are within Congress's power to tax and spend for the general welfare.
However, the bill's focus on specific pension plans could raise concerns about equal protection under the Fifth Amendment, as it may be argued that it unfairly benefits a select group of individuals. The bill does not appear to infringe upon any other specific constitutional rights or limitations.
Overall, the bill's alignment with the Constitution is mixed, with potential benefits under the General Welfare Clause but possible concerns regarding equal protection.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).