The U.S. Bankruptcy Court for the Southern District of New York authorized creation of the Auto Retiree VEBA Trust which will provide thousands of retirees of auto part manufacturers access to subsidized health care benefits.
According to a statement by Farella Braun + Martel Restructuring & Insolvency practice, which represented retirees of Metaldyne Corporation of Plymouth, Michigan, the trust, set up to provide benefits for Metaldyne retirees, was successful in its motion to establish a VEBA under Bankruptcy Code Section 105 and IRS Code Section 35(e)(1)(K). The Auto Retiree VEBA Trust benefits retirees, between the ages of 55 and 65, of Metaldyne and all other auto part manufacturing companies whose headquarters were, or presently remain, in the states of Ohio, Michigan, or Wisconsin and with pensions currently trusted by the federal Pension Benefit Guaranty Corporation.
Retirees of these companies, which also include Allis-Chalmers, Amcast, Collins & Aikman, Delphi, Hayes-Lemmerz International, and dozens of others, are eligible regardless of current state residency.Auto Retiree VEBA Trust participants, many of whom were forced into early retirement, have the ability to take advantage of the federal Health Coverage Tax Credit, which reimburses 65% of health insurance and prescription drug premiums (including dental and vision care premiums of any combined program) for participants, their spouses, and dependents.
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