Health Care Trust (General Motors)
August 3, 2011
After two years of tough negotiations and legal work, a settlement has been reached between the CAW, General Motors Canada, and a representative steering committee of GM retirees regarding the creation of a new Health Care Trust (HCT) for GM retirees.
The creation of the HCT was mandated by the federal government during the 2009 restructuring as a condition of the $10 billion in public support which was provided to the company at that time.
Under this system, future retiree health benefits will be paid by the HCT (not by GM). The HCT will be endowed with up-front contributions from GM, which will be invested to generate additional income to support future retiree health payouts (similar to how pension funds operate). A similar HCT at Chrysler was also established as a result of the 2009 restructuring of that company, and is now operational. The HCT will be managed by an independent board of trustees, including experts in health care costs, investment, and actuarial science.
The proposed CAW-GM HCT settlement represents a significant improvement over the initial HCT agreement reached between the CAW and GM in 2009. Thanks to the efforts of the independent steering committee of retirees, GM will contribute hundreds of millions of dollars in additional funding to the trust fund. Back in 2009, the CAW pushed the government to accept $300 million in additional funding for the HCT, above and beyond the government's initial proposed cap.
The joint efforts of the CAW bargaining committee and the independent committee of retirees have resulted in very important improvements in funding for the HCT that will guarantee the large majority of retiree benefits indefinitely, even if GM were to subsequently go bankrupt.
Information meetings are being held for GM retirees in St. Catharines, Oshawa, London, Windsor, and Boisbriand, Quebec over the next two weeks.
Here is a schedule of the meetings:
Niagara Falls: Tuesday, August 2, at 10:00 a.m., at the Scotiabank Convention Centre (6815 Stanley Avenue, Niagara Falls, L2G 2N6)
Oshawa: Thursday, August 4, at 10:00 a.m., at the General Motors Centre (99 Athol Street East, Oshawa, L1H 1J8)
Windsor: Friday, August 5, at 10:00 a.m., at the Giovanni Caboto Club (2175 Parent Avenue, Windsor, N8X 4K2)
Boisbriand: Tuesday, August 9, at 10:00 a.m., at the Centre d'excellence Sports Rousseau (3600 de la Grande-Allée Boulevard, Boisbriand, J7H 1M9)
London: Tuesday August 9 at 10:00 am (location TBD).
The meetings are hosted by the independent steering committee of retirees and their independent legal counsel, to explain the settlement and recommend its approval.
There is more independent information on the proposed settlement available from the court-appointed administrator for the HCT settlement: www.gmclhctsettlement.ca
Particularly useful is a list of Frequently Asked Questions that has been prepared by the independent lawyers: http://www.gmclhctsettlement.ca/english/documents/FAQs-English-FINAL-07-19-2011.pdf
VIDEO - Background & History of the HCT at GM Canada - by Jim Stanford (August 2011)
To read Ken Lewenza's Letter to GM Retirees please click here
To read Ken Lewenza's Letter to GM Retirees in French please click here