According to NewsRx.com, these benefit payments, which about 9,000 people will be eligible for, will amount to $50 for each month of premiums paid for Medicare Part B medical coverage during 2007.
The move by the United Steelworkers and its partner unions is meant to give some aid to those retirees whose pension and health care coverage was terminated in 2004 while the company was in bankruptcy (See PBGC to Pick Up Kaiser Aluminum Pension Plan and PBGC Works Out Asset Disposition with Kaiser Aluminum and PBGC Takes Four Kaiser Plans with $9.5M Deficit )
“These folks worked their whole career and deferred wage increases for what they thought were guaranteed lifetime benefits,” said USW Kaiser Negotiating Committee Chairman Bob Bratulich, according to the news report.
The trust fund – voluntary employees’ beneficiary association (VEBA) – was created in 2004 as part of a reorganization attempt to help dig the company out of bankruptcy. The trust assets were used to restore prescription drug coverage for Medicare eligible retirees.
When the company emerged from bankruptcy in 2006, VEBA assets were used to restore prescription drug coverage for Medicare and eligible retirees. The trust received 11.4 million shares of newly issued company stock. As they are converted to cash, they will be used to cover retiree health care benefits.