Funding retiree health benefits vector system
Funding retiree health benefits
Vector data system
vector data system
case Co, which was a vector data system wholly owned subsidiary of Tenneco until 1994 when it was spun off and renamed Case Equipment. It vector data system is now CNH America. In 1996 Tenneco merged with El Paso National Gas to form El Paso Tennessee Pipeline.
The United Auto Workers (UAW) had negotiated collective bargaining agreements with Case that required the agreed-upon group insurance and pension plan to run concurrently In 1995 the UAW and Case signed a letter of agreement that seemed to cap Case’s liability. During the years 1998-2003, El Paso increased the retiree portion of health insurance premiums from $0 to $561 per month.
The plaintiffs sought an injunction in district court alleging that El Paso had breached its labor agreements under the Labor-Management Relations Act and the Employee Retirement Income Security Act. The district court granted their request. El Paso appealed the decision.
Result. For the plaintiffs. The Sixth Circuit held that while employee medical benefits don’t normally
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come with the same vesting rights as pensions, parties can agree that these benefits should vest. Relying on UAW v. Yard-Man, Inc, the court looked to the letter of agreement for (1) vector data system the explicit language, (2) the words and phrases used and (3) the overall context of the agreement. The plaintiffs provided booklets, notices and memoranda to document their contention that the employer intended to vest the plans. The court concluded that, because the agreement used similar language to refer to both the group insurance and vector data system the pension plan, the vector data system parties intended both plans to vest. In addition, the court held that the original intent of the UAW/Case letter of agreement was
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to limit the impact of funding on the financial statements, not to limit the company’s funding responsibility.
The increasing numbers of retirees, rising health care costs and the growing trend of cost-shifting medical insurance premiums from employers to retirees ensure that other courts will address this issue. To support potential future claims, both currently employed and retired taxpayers should maintain all necessary documentation pertaining to their vector data system benefit packages vector data system.
