subject: Dol Issues Exemption To Allow New Health Plan For Ford Motor Retirees To Acquire Company Securitesi [print this page] Ford Motor CoFord Motor Co. had requested for an exemption to the U.S. Department of Labor under its Employee Retirement Income Security Act (ERISA) which has been approved. Through this exemption the Ford Motor Co. will be able to transfer the company securities to a voluntary employee beneficiary association trust. Hence the companys retirees will now benefit from the new health plan established by the Ford Motor Co. in coordination with the VEBA trust.
The new health plan will manage to cover a considerable number of more than 285,000 retirees with their dependants. Additionally, this plan will also cover quite a few numbers of current active employees of the company. The Ford Motor Co. has intended to contribute a sum of $13.2 billion towards VEBA to initiate the new health plan.
The exemption been granted under the DOL employee benefits will allow the Ford Motor Co. to carry out an agreement with the United Auto Workers(UAW). Ford Motor Co. will contribute more than $13.2 billion including up to $6.6 billion in company stock to a health-care VEBA for its retirees.
The UAW voluntary employee beneficiary association can now hold the company securities in excess of the amount permitted for an employer under the Employee Retirement Income Security Act.
When the payments are made wrongly during the transition of benefit plans to the new health plan, the health plans and VEBA can pay back each other. The Ford Motor Co. is also provided with an option of claiming the securities which had been paid wrongly to the plan. To represent the new health plan, the exemption calls for the appointment of an independent fiduciary.
The same trust holding the assets of the Chrysler and General Motors plans will hold the assets of VEBA plans. Each plan has separate retiree accounts in the VEBA trust.
