UAW to Pick 5 on VEBA Board: Details Emerge on How Trust Will Work
By Tim Higgins, Detroit Free Press
Feb. 23–Five of the 11 members of the committee that will oversee the retiree trust being set up to pay for UAW autoworkers’ retiree health care will serve at the discretion of the UAW president, according to court records.
New details about how the Voluntary Employee Beneficiary Association trust will work emerged in paperwork filed with U.S. District Court for the Eastern District of Michigan.
The paperwork is part of a proposed settlement by the UAW and UAW retirees with General Motors Corp. that should pave the way for the so-called VEBA, which was agreed to during last year’s labor negotiations.
A judge must still approve the deal before it can be finalized.
“This proposed settlement will put into effect what we negotiated in 2007,” UAW President Ron Gettelfinger said in a statement issued Friday. “Through hard work and hard bargaining, we have negotiated an innovative way to secure health care benefits for UAW GM retirees.”
Similar filings are expected for agreements with Chrysler LLC and Ford Motor Co.
The VEBA was the cornerstone of the landmark labor agreements that shift billions of dollars of long-term health care obligations from the automakers to the trust.
In January, Gettelfinger said the new contracts will save the automakers “in the neighborhood of $1,000 per vehicle.”
According to the court filings, the committee will be the trust sponsor, named fiduciary and administrator.
After 2011, the board will have the sole responsibility to determine the scope and level of benefits and will have the power to raise or lower the level of post-retirement medical benefits based on financial, actuarial, clinical and/or efficiency considerations, the records add.
The trust committee will have 11 members: Five will be UAW-appointed members and six will be independent members, initially approved by the court.
“The UAW members shall serve at the discretion of the UAW International president and may be removed or replaced, and a successor designated, at any time by written notice from the UAW International president to the committee,” the paperwork filed Thursday said.
The independent members are to have experience in such fields as health care, employee benefits, asset management, human resources, labor relations, economics, law, accounting or actuarial science.
Independent members and their families are prohibited from having a financial tie with the automaker or UAW “if such relationships could reasonably be expected to impair such person’s exercise of independent judgment.”
A person who works for or has worked for an automaker cannot serve on the committee unless that person is a retired UAW member or a UAW member on leave from the company.
Independent committee members will serve staggered three-year terms.
Two of the original independent members will initially serve two years and two will serve one year. Committee members can serve more than one term.
Nine members can vote at any time to replace an independent committee member.
The formal trust agreement laid out a framework for some committee members to be compensated.
The trust document, however, leaves blank the value of the annual retainer and the fee to be paid for each meeting participated in by members.
UAW members of the committee who are employed by the UAW or a local union are not eligible for compensation but can receive reimbursements for “reasonable expense.”
The trust agreement said participants and beneficiaries are entitled to be “reasonably informed as to how the trust’s assets are used and cared for.” Annually, the committee must notify them by mail or “other suitable means” about the trust’s spending and investment returns, among other financial measures.
UAW members will be sent copies of the agreement and have until May 13 to submit objections. A so-called fairness hearing has been set for June 3.
Contact TIM HIGGINS at 313-222-8784 or thiggins@freepress.com.
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