The U.S. Department
of Labor’s Employee Benefits Security Administration has granted an
exemption allowing the Ford Motor Co. to transfer company securities to
a voluntary employee beneficiary association trust that funds a new
health plan established to provide health benefits for the company's
retirees. The new health plan will cover in excess of 285,000 retirees
and their dependents, and a small number of active employees.
Ford requested an exemption under the Employee Retirement Income
Security Act to allow the VEBA plan to receive and hold employer
securities of Ford in excess of the amount and kind allowed under the
Employee Retirement Income Security Act. The law gives the Labor
Department authority to grant exemptions that protect the interests of
plan participants and beneficiaries.
Ford is headquartered in Dearborn, Mich., and according to the
latest data available, employed approximately 73,000 employees in North
America.
Under the exemption, Ford can transfer company securities to the
VEBA. The exemption also allows Ford, its health plans and the VEBA to
reimburse each other for benefit payments mistakenly paid by the wrong
entity during the transition of benefits coverage to the new plan. In
addition, the automaker can recover deposits mistakenly made to the
plan. A major condition of the exemption is appointment of an
independent fiduciary to represent the plan with regard to Ford
securities transactions.
The assets of the VEBA plan will be held by the same trust that
holds the assets of the plans established by Chrysler and General
Motors for their respective retirees. There are separate retiree
accounts for each plan that is funded through the VEBA trust.