Ford to fund a new health plan for company retirees

Article by Christian Andrei, on August 29, 2010

Under a U.S. Labor Department proposal, Ford Motor Co. would be allowed to transfer company securities to a voluntary employee beneficiary association (VEBA) trust to fund a new health plan for company retirees.

In a statement released very recently, the department said that the plan is expected to cover more than 285,000 retirees and their dependents, as well as a small number of active retirees.

Just so the VEBA plan can keep a larger amount of securities than what is allowed under the law, the government had proposed that Ford's request for an exemption under the Employee Retirement Income Security Act be granted.

The department related that the plan originated from a 2007 agreement between Ford and the UAW. Ford spokeswoman Marcey Evans said that its health care costs were completely out of control and so the company had to do something to manage it.

Meanwhile, department spokeswoman Gloria Della said that Ford was the last of the Detroit 3 to separate its retiree health plan assets from those of its active employees.

Moreover, Ford will contribute to the trust two promissory notes payable to the VEBA, warrants to buy Ford common stock, and $580 million in cash. VEBA also will be funded with assets from other Ford health plans.

Topics: ford, united states

If you liked the article, share on:


Login or Create new account to add a comment!


Starting early 2017, the new Audi Q7 will be available with the new 2.0-liter TFSI four-cylinder engine that makes it not only faster but also lighter and more efficient than...
by - October 25, 2016
Soon, Fiat Chrysler’s Dodge brand will be ending the production of the Dodge Viper. So practically, the 2017 Dodge Viper will be the last Viper up for grabs. Gerry Wood...
by - October 25, 2016
Say hello to the fastest accelerating production car in the world: the new 2017 Tesla Model S P100D. Powered by a 100 kWh battery, this new model basically outruns almost...
by - October 25, 2016
Ever heard of the “Lynk & Co” automotive brand? Well, it is highly likely people haven’t. This is practically because this is new brand created by the joint venture between...
by - October 25, 2016
Mitsubishi is now officially part of the Renault-Nissan alliance after Nissan took over the Japanese car company recently. We know a lot has been happening in the car industry, but...
by - October 24, 2016