DETROIT, Jan. 28 (UPI) -- A federal judge in Detroit said the government's pension insurance agency can begin paying retired Delphi employees reduced pension checks.
U.S. District Judge Arthur J. Tarnow allowed that the Pension Benefit Guaranty Corp. can start sending checks, reduced as much as $3,700 per month, but gave the federal agency the option of placing funds in escrow or file an agreement to pay full benefits should a court decide the PBGC had overstepped its jurisdiction in taking over Delphi's pension plans.
The average plan will be cut $850 per month, said PBGC spokesman Jeffrey Speicher.
About 21,000 former Delphi workers have filed a class-action lawsuit to block the PBGC from assuming the company's pension plan, The Detroit News reported Thursday.
The cuts affect salaried employees. General Motors Co, which purchased part of the bankrupt company this fall to keep supplies going, has said it would maintain pension benefits for Delphi's unionized hourly retiree.
Speicher said about 3,400 retirees would have their benefits cut starting this week, while about 4,100 would not. Another 700 were under review, many of them cases complicated by divorces, the newspaper said.
About 2,900 others would have benefits cut in March, Speicher said.