Labor Department Advocating Rule Exemption To Boost GM Health Care Trust
The Associated Press: "The Labor Department said Thursday it was seeking an exemption for General Motors' new retiree health care plan that would implement the automaker's move to transfer company securities into the health care trust.
The AP continues: "United Auto Workers' retiree health care trust fund received a 17.5 percent ownership stake in the new GM as part of the company's government-led efforts to emerge from bankruptcy protection last summer. The health care trust, which begins Dec. 31, will cover 700,000 GM retirees and dependents. The proposed exemption would implement the GM plan developed through bankruptcy courts to transfer company securities, including common stock, preferred stock and $2.5 billion to the health care trust." A federal law prohibits such plans from holding large amounts of its assets in employer securities (Thomas, 9/17).
Dow Jones Newswires/The Wall Street Journal: "However, the pension law gives the Labor Department the ability 'to grant exemptions that protect the interests of plan participants and beneficiaries.' The new GM purchased a majority of General Motors Corp.'s - the old GM - assets following the old GM's June 1 bankruptcy filing. The new GM is now majority-owned by the U.S. government" (Hughes, 9/17).