Deere Retirees Hire Lawyers to Fight Health Care Changes
By Pat Kinney, Waterloo-Cedar Falls Courier, Iowa
Jan. 11–MOLINE, Ill. — A group of John Deere nonunion, salaried retirees has hired legal counsel in its fight to retain health benefits.
The Flex Retirees Organization announced Thursday it has hired a Phoenix law firm, contending Deere broke a promise to provide retirement health care benefits comparable to those members had while working, the group said in a press release.
No legal action has been taken as yet. But local FRO member Marv Dillavou of Cedar Falls said the group means business.
“I think the idea of retaining the firm is if they (Deere officials) don’t want to correct the situation, then they (FRO members) will go through with the filing” of a lawsuit.
“It’s not just an idle threat, I don’t believe,” Dillavou said.
FRO organizers have scheduled a series of meetings with Deere retirees, including one at 10:30 a.m. Jan. 18 at the Supervisors Club on Dewitt Road in Waterloo.
Dillavou said the FRO is seeking contributions toward its legal expenses. Members also are scheduling meetings next week in Moline, Dubuque, Ottumwa and Des Moines.
In a prepared statement, Deere spokesman Ken Golden said: “Deere & Co. continues to believe that any legal action by the FRO group is not warranted.”
Golden said the health care program implemented for some retirees on Jan. 1 takes advantage of changes in the U.S. tax code and Medicare and allows individualized plans.
“We continue in our belief that involvement by retirees in their own health care decisions will result in choices that are better matched to each person’s individual circumstance,” Golden said.
In October Deere announced health care changes for salaried employees who retired after July 1, 1993, affecting an estimated 750 Waterloo-area retirees and dependents, part of about 5,000 affected companywide.
It does not affect those who retired before July 1, 1993, or union-wage retirees covered under the collective bargaining agreement with the United Auto Workers. Deere has a total of 28,000 retirees and dependents.
Part of the changes involve reimbursable “retiree medical credits,” which Medicare-eligible retirees and spouses can apply toward premiums or other health care expenses, and company-supported health savings accounts for early retirees not yet eligible for Medicare.
“We believe the large proportion of retirees will have lower health care costs with this approach,” Golden said when the changes were announced. Deere says it still pays three-fourths of employee health care costs.
About three weeks later, the FRO organized in opposition to the changes.
In the press release Thursday, FRO members contended Deere indicated to U.S. Sen. Charles Grassley it intended to figure in cost of living to retirees health care credits allowed under the tax changes. That is about 2.7 percent, FRO members said, when retiree health care costs are increasing about 12 percent annually.
“If this same rate were continued over the short period of the next five years, retirees would be picking up, after compounding, approximately 62 percent of the increased cost of health care,” FRO members said.
Regarding the contacts with Grassley’s office, Golden said “company health plans are reviewed annually. However there has never been a commitment to linking that review to any particular financial index.” Grassley staffers said they contacted Deere in response to a constituent’s concerns.
An older group of salaried retirees threatened legal action against Deere over proposed health care changes in the mid-1990s, but apparently reached a resolution with the company prior to any filing.
Contact Pat Kinney at (319) 291-1484 or pat.kinney@wcfcourier.com
—–
To see more of the Waterloo-Cedar Falls Courier, or to subscribe to the newspaper, go to http://www.wcfcourier.com/.
Copyright (c) 2008, Waterloo-Cedar Falls Courier, Iowa
Distributed by McClatchy-Tribune Information Services.
For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
NYSE:DE,