Pension Gains for Future and Current Retirees

During this round of negotiations, the UAW bargaining team reaffirmed our union's commitment to our retired members. The proposed agreement includes pension and other improvements for current and future retirees.

The basic benefit will increase in each year of the proposed agreement; these increases will total $4.20 per month per year of credited service over the four-year agreement. In addition, the concept of the “rolling rate” increases for workers who retire during the term of the proposed agreement is continued.
The 30-and-out benefits will increase by $290 by the last year of the agreement. With the increases, the 30-and-out benefits will reach $3,020 by the end of the proposed agreement.
Lump-sum payments will be provided for current retirees in each of the four years of the new agreement, including a payment in December 2003.
Retirees will be provided a $1,000 voucher toward the purchase of a new GM vehicle in the first and third years of the agreement.
Workers will now have the option of designating any person as beneficiary for their pension benefits under a new contingent annuitant option.

RETIREMENTS UNDER THE NEW CONTRACT

Basic Benefit Rate

The Basic Benefit Rate is increased in each year of the proposed four-year agreement. These increases will total $ 4.20 per month per year of credited service by the final year of the agreement. These increases will be effective Oct. 1 of each year of the agreement.

Table 1 shows these new basic benefit rates.

Table 1
For Basic Benefit Payable
Benefit class code	Current contract	10/1/03 to 9/1/04	10/1/04 to 9/1/05	10/1/05 to 9/1/06	10/1/06 and after
A	$46.70	$47.75	$48.80	$49.85	$50.90
B	$46.95	$48.00	$49.05	$50.10	$51.15
C	$47.20	$48.25	$49.30	$50.35	$51.40
D	$47.45	$48.50	$49.55	$50.60	$51.65

Beginning in 2004, retirees who have an outstanding overpayment under the Life and Disability Benefits program will have their basic benefit increases reduced by 35 percent until their debt is repaid.

30-and-Out Supplement

The 30-and-out benefits will also be increased a total of $290 for workers who retire before their Social Security 80 percent date during the term of the agreement. This will increase the 30-and-out income from the current $2,730 to $3,020 per month in the fourth year of the agreement. The 30-and-out monthly benefits for workers who retire under the new agreement are displayed in Table 2.

Table 2
30-and-Out Supplement for Benefits Payable
Current contract	10/1/03 to 9/1/04	10/1/04 to 9/1/05	10/1/05 to 9/1/06	10/1/06 and after
$2,730	$2,805	$2,875	$2,950	$3,020

Temporary Benefits

The temporary benefit, which is paid to T&PD retirees who have not reached their Social Security 80 percent date and are not eligible for Social Security benefits and workers who retire under the mutual retirement provisions, will be increased in each year of the proposed agreement. These increases will take the temporary benefit from the current $44.45 (maximum $1,333.50) to $49.80 (maximum $1,494).

This benefit is paid in addition to the unreduced basic benefit until the Social Security 80 percent date or until Social Security disability benefits are payable, whichever occurs first. The new temporary benefits are shown in Table 3.

Interim Supplement

The interim supplement will be increased for workers who retire under the early retirement provisions prior to the Social Security 80 percent date with less than 30 years of credited service. This supplement will be increased in each year of the proposed agreement. The new amounts per month per year of credited service, payable at retirement ages 60 and 61, are: $43.45 effective Oct. 1, 2003; $44.70 effective Oct. 1, 2004; $46.10 effective Oct. 1, 2005; and $47.30 effective Oct. 1, 2006. Younger retirees will receive reduced amounts.

Vehicle Vouchers

UAW retirees will receive two vehicle vouchers worth $1,000 toward the purchase of a GM vehicle during the term of the proposed agreement, one in the first year and one in the third.

These vouchers may be used by the retiree, or by any person who is eligible to purchase a vehicle.

There will be no tax consequences relating to use of the vouchers, but they may not be sold to a third party.

Special Survivorship Option

The benefits for survivors receiving benefits under the Special Survivorship Option will be increased from $11.90 per month per year of credited service to $13.10 effective Oct. 1, 2003.

Social Security “Age Creep” Adjustment

The Social Security “age-creep” adjustment, first negotiated in 1999, is continued in this agreement. Under the proposed agreement, current retirees born in 1941 through 1945, and workers born during these years who take an early retirement under the proposed contract, will have the payment of their supplements or temporary benefits extended to their so-called 80 percent date. The requirement that workers retire prior to age 62 and one month in order to be eligible to receive the additional supplements and temporary benefits has also been eliminated.

Future Retirees Win New Right to Designate Beneficiaries

During these negotiations, our UAW bargaining team added optional benefits to the pension program that will allow enhanced financial planning for future retirees. Workers will now have the option of designating any person as beneficiary for their pension. This is referred to as the contingent annuitant option.

Under this option, effective April 1, 2004, a future retiree may elect in 5 percent increments a benefit of 5 percent to 100 percent benefit for any beneficiary that the retiree chooses. The benefit is paid for by reducing the basic benefit the retiree would receive by a factor based on the ages of the retiree and the beneficiary.

Examples:

A retiree age 60 who has a 57-year-old beneficiary elects the 50 percent benefit. The retiree’s $1,600-per-month basic benefit is reduced by 11.5 percent to $1,416 per month, payable for the rest of the retiree’s life. Upon the retiree’s death, the beneficiary, if still living, would receive 50 percent, or $708, per month, for the remainder of his or her life.
If the same retiree took the 100 percent option for the same beneficiary, the reduction is 19.25 percent; the retiree’s income is then $1,292 per month until death. The beneficiary, if still living, would then receive the same $1,292 per month until death.

Some restrictions to this optional benefit apply:

If the retiree is married, the retiree’s spouse must consent to the designation of a different beneficiary.
The option is available only at the time of retirement and can be rescinded only if the retiree is married or marries and wants to take a surviving spouse option and the contingent annuitant provides evidence of good health.
If the age of the retiree exceeds that of the beneficiary by more than 10 years, and the beneficiary is not the retiree’s spouse, federal law limits the percent payable to the beneficiary.
If the beneficiary dies before the retiree, the retiree’s benefit does not revert to the single life amount.
There is no pre-retirement coverage under this option, and disability retirees are not eligible.
Only one beneficiary can be selected.
The beneficiary will not receive other GM or Delphi benefits because of the receipt of this annuity unless otherwise eligible.

This new optional benefit does not change the existing 65 percent surviving spouse benefit coverage.

Credited Service Pickup

Workers who have at least five years seniority as of Oct. 1, 2003, and who were absent from work due to a layoff in 1987, 1988 and 1989 will be credited with 40 hours of credited service for each complete week of that layoff, not previously credited, during which the worker had seniority multiplied by the percentage shown in Table 4.

Spouses of T&PD Applicants Gain Additional Protection

The requirement that a disabled worker must have a terminal diagnosis to apply for a disability pension prior to the five-month waiting period has been eliminated.

Automatic Enrollment When Retired Worker Marries

To protect the surviving spouse benefits for retirees who marry or remarry after retirement, your negotiators established a system where the new spouse will be enrolled for these benefits automatically. When the retiree enrolls the new spouse for health care benefits or signs the new spouse on as a life insurance beneficiary, the surviving spouse enrollment follows automatically. The surviving spouse will be eligible for the benefits after one year of marriage. This benefit can be declined only with the consent of the spouse, and is not available to any retired worker who has previously declined the coverage.

Retirees, Surviving Spouses Get 4 Lump-Sum Payments

To protect against projected inflation, current UAW GM and Delphi retirees and surviving spouses will receive four lump-sum payments of $800 during the life of the proposed agreement in December of each year starting with December 2003. Surviving spouses will receive a payment of 65 percent of this amount, or $520.

Beginning in 2004, retirees who have an outstanding Extended Disability overpayment will have their lump-sum payments reduced by 35 percent until the overpayment is repaid.