GM Canada agrees to pay $9 million, restore retirement benefits
Friday, Aug 01, 2014 08:15 am
TORONTO - General Motors of Canada Ltd. has agreed to pay $9 million and restore most retirement benefits to nearly 3,300 salaried and executive retirees.
The proposed settlement will settle a lawsuit launched on behalf of the retirees, who saw their health and life insurance benefits cut or eliminated by GM when the automaker began major restructuring in 2008 and 2009.
Louis Sokolov, one of two lawyers representing the class members, said GM will use a $9 million fund to reimburse retirees for costs incurred between 2008 and August 31 when the benefits were cut. He said the total value of GM restoring the benefits, based on actuarial estimates, is $135 million.
Most of the benefits will be restored beginning September 1.
Sokolov said in some cases, retirees who had worked for the automaker for more than four decades saw their life insurance benefits cut from $100,000 to $20,000.
"When you have a group of 3,300 people, you have 3,300 different stories but the overwhelming story we hear from class members was that the cuts had detrimentally affected their retirement security," he said Friday. "It's a big deal to them to get that back."
This deal applies to employees who retired between 1995 and 2011.
A spokesperson for General Motors said the company couldnít comment at this time.
The agreement comes a year after a Superior Court of Justice ruled in favour of the salaried and executive retirees, finding GM did not have the contractual authority to reduce their health care and life insurance benefits after they retired.
The settlement, which must still be approved by a judge, does not cover GMís hourly retirees, who reached a separate deal with the company through their union in 2011.
The two sides finalized the negotiated settlement on Wednesday. The proposed settlement goes before a judge on Aug. 7 for approval.