Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...
AK Steel Corp. reached a deal to provide continued health-care coverage to more than 1,200 current and future retired hourly employees and their surviving spouses.
The settlement, if approved by the court, would provide a modified plan of retiree health-care benefits, company contributions, and the creation of a voluntary employees’ beneficiary association plan, according to a joint motion for preliminary approval of class settlement filed March 2 in federal court in Michigan.
The parties’ agreement calls for AK Steel to make three lump sum contributions to the VEBA in the amount of $1 million each during the next three years. The company would also make quarterly contributions to the plan in the amount that equals $250 times the number of hourly employees who are actively at work in the bargaining unit represented by the United Auto Workers.
The proposed deal comes weeks after the U.S. Supreme Court issued separate opinions addressing disputes over union retiree health benefits. Last week, the court ordered the U.S. Court of Appeals for the Sixth Circuit to review its 2017 decision awarding lifetime health benefits to certain retirees of auto parts manufacturer Kelsey-Hayes Co. Earlier last month, the Supreme Court reversed another Sixth Circuit decision involving the retiree benefits, this time of construction equipment designer CNH Industrial.
The proposed AK Steel deal was reached two months after a group of retirees sued the company on behalf of current and future retirees who are or were represented by the UAW in collective bargaining. In their lawsuit, the retirees sought to stop the company from unilaterally modifying vested health-care coverage for them and their spouses.
This isn’t the first time AK Steel has been embroiled in a dispute over retiree benefits. In 2010, a federal judge in Ohio approved a settlement that required AK Steel to provide its hourly and salaried retirees with continued health benefits, valued at nearly $179 million. In 2008, another judge in Ohio approved a deal that called forAKSteel to contribute $663 million over four years to a VEBA trust for its retirees.
McKnight Canzano Smith Radtke & Brault PC and Legghio & Israel PC represent the retirees and the UAW. Zausmer August & Cladwell PC and Taft Stettinius & Hollister LLP represent AK Steel.
Nelson v. AK Steel Corp., E.D. Mich., No. 2:17-cv-14209-TGB-SDD, joint motion for preliminary approval of settlement, class certification and appointment of class representatives and class counsel 3/2/18.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)