DOL Issues Final Exemption to New Ford Motor Co. Health Plan
The Department of Labor's Employee Benefits Security Administration has granted an exemption allowing the Ford Motor Co. to transfer company securities to a voluntary employee beneficiary association trust that funds a new health plan established to provide health benefits for the company's retirees. The new health plan will cover in excess of 285,000 retirees and their dependents, and a small number of active employees.
Ford requested an exemption under the Employee Retirement Income Security Act to allow the VEBA plan to receive and hold employer securities of Ford in excess of the amount and kind allowed under the Employee Retirement Income Security Act. The law gives the Labor Department authority to grant exemptions that protect the interests of plan participants and beneficiaries.
Ford is headquartered in Dearborn, Mich., and according to the latest data available, employed approximately 73,000 employees in North America.
Under the exemption, Ford can transfer company securities to the VEBA. The exemption also allows Ford, its health plans, and the VEBA to reimburse each other for benefit payments mistakenly paid by the wrong entity during the transition of benefits coverage to the new plan. In addition, the automaker can recover deposits mistakenly made to the plan. A major condition of the exemption is appointment of an independent fiduciary to represent the plan with regard to Ford securities transactions.
The assets of the VEBA plan will be held by the same trust that holds the assets of the plans established by Chrysler and General Motors for their respective retirees. There are separate retiree accounts for each plan that is funded through the VEBA trust.
The final exemption was published in the March 24 edition of the Federal Register.