TORONTO, Nov. 8, 2011 /CNW/ - The Canadian Auto Workers union welcomes
the finalization of a new and independent trust fund that will cover
the costs of supplementary health care benefits for retirees from
General Motors Canada.
The fund, called the Auto Sector Retiree Health Care Trust (asrTrust),
was negotiated as part of the government-supported restructuring of
General Motors in the spring of 2009. Following two years of legal
implementation and consultation with GM retirees, the trust has now
been approved by the Ontario Court of Justice and will take effect.
This system has already been in place providing supplementary health
care benefits for retired workers at Chrysler Canada since the
beginning of this year. The terms of the GM program took longer to
implement due to more complex legal and economic issues, and the much
larger number of retirees at the company.
Supplementary health benefits (including prescription drug coverage,
dental and vision care, etc.) will now be provided to the estimated
32,000 Canadian retirees of GM by the independent trust fund, instead
of by the company. GM Canada will pay a total of over $2.5 billion
into the fund over the next seven years, beginning with an initial
contribution of $1 billion (adjusted for interest, the costs of
benefits in 2010 and 2011, and some administrative costs).
The funds contributed by GM, plus investment income earned on those
assets, will be used to fund retiree health benefits (including
benefits for existing workers at GM, after they retire). The
independent trust therefore has assets from which to pay future
benefits, so that security of benefits is no longer dependent
exclusively on the financial health of General Motors Canada.
"This represents the final step in the restructuring of GM Canada, and
now we can move forward with focusing on ensuring GM's future success
and presence in Canada," said CAW President Ken Lewenza.
"While the HCT system is not perfect, it provides our retirees with a
level of security for future benefits that is far preferable to the
previous system," Lewenza added. "Without the HCT, if a company goes
bankrupt, retiree health benefits are lost completely. Now we have
money in the bank to ensure at least partial payment of benefits, no
Lewenza also complimented the work of the independent retirees' steering
committee, and their independent legal and financial advisors, for
their work over the last two years to strengthen the funding base for
the GM HCT. The independent retirees' committee was able to negotiate
additional funding commitments by GM, equal to $260 million, above and
beyond the funding initially committed by the company in 2009.
The HCT will be managed by an independent board of trustees that
includes a number of well known and highly respected experts in the
fields of health care policy and investments.
SOURCE Canadian Auto Workers Union (CAW)
For further information:
CAW Communications Shannon Devine (cell) 416-302-1699 or John McClyment (cell) 416-315-3202