GM to Contribute $3B to Health Fund for Retirees

April 14, 2006 ( - General Motors Corp. will spend $3 billion to create a fund to help pay health care costs for future retirees.

The Detroit News reports that GM will set aside $1 billion annually in 2006, 2007, and 2011. The fund is part of an agreement to get a pretax savings of about $3 billion a year in health care costs from union workers.

The agreement was approved by GM retirees in November and requires them to pay part of their health insurance premiums for the first time (See GM, UAW Reach Health Care Coverage Agreement ). Under the agreement, retirees would have to pay up to $752 annually for families and $370 for individuals for their health care. The payments would be higher if not for the health care fund.