The United Auto Workers has reached an agreement to shell out $354.5 million for the establishment of an independent retiree health care trust for its employees – the Voluntary Employee Benefits Association. The creation of the VEBA is part of a proposed settlement of a federal lawsuit filed in December 2014 by the union’s retired staff members who opposed the 2013 changes to its retiree health care program.
The amount is consists of $346 million for the VEBA’s creation and $8.5 million for the administration of the benefits, according to the proposed settlement. The trust would also have its own independent board of directors separate from the union.
UAW President Dennis Williams said in a statement that the proposed settlement is similar to the retiree health care settlements that the UAW has reached with General Motors, Ford, and Chrysler with respect to UAW-represented employees and retirees.
He noted that the settlement would create and fund an independent VEBA trust that will provide retiree health care benefits to current and future retirees from the union’s staff.
Three UAW staff retirees and two office employee unions filed the lawsuit against the UAW in December 2014 in the United States District Court for the Eastern District of Michigan in Detroit after the union declined requests to go into arbitration and revisit the benefit modifications made in 2013.
The lawsuit had filed for class-action status. Unions involved in the case are the Office and Professional Employees International Union, Local 494, and the Staff Council of International Representatives – all representing office staff at the UAW. The unions and the UAW have already filed a joint motion for approval of the settlement.