General Motors' retirees expect to lose dental and vision coverage in July and will have higher health-care co-payments, but they're happy to hear that their pensions will remain part of the new General Motors once it emerges from bankruptcy.
"Assuming the new company does good, then everything should be fine," said Lonnie Morgan, chairman of the United Auto Workers Local 276 Retired Workers Chapter and former union president at GM's Arlington, Texas, plant.
The federal Pension Benefit Guaranty Corp., which guarantees pensions up to certain limits, noted Monday that GM and the U.S. government intend for the automaker's pension to stay with GM — and not be jettisoned.
"The PBGC will work with all parties to achieve that outcome, which would be in the best interests of GM's more than 670,000 pension plan participants and the pension insurance program," the agency said in a statement.
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Morgan, 67, said that "under the circumstances, we came out pretty well" in a concessions agreement ratified last week by union members. Retirees are covered by it, but don't get a vote.
"It used to be we'd go to the bargaining table, and usually what we asked is what we got. Now it's what we're giving away," said Morgan, who retired in 2002 and, five days later, went to work for Lynn Smith Chevrolet in Burleson, where he is the public relations and marketing director.
A UAW trust is taking over GM's retiree health-care costs, removing those obligations from the company's books. In return, the trust gets 17.5 percent of the new GM and an opportunity to buy another 2.5 percent later at a discounted price.
Among other things, the new UAW deal cuts off coverage for retirees' erectile dysfunction drugs, except for certain cases involving high blood pressure. And it no longer covers acid-reducing drugs in most cases for retirees.
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