Non-profit

United Auto Workers Retiree Medical Benefits Trust

Website:

www.uawtrust.org

Location:

Detroit, MI

President:

Robert Naftaly

Formation:

2007

The United Auto Workers Retiree Medical Benefits Trust is a private organization which provides medical benefits to over 800,000 retired auto workers from Ford, Chrysler, and General Motors. The Trust was established through agreements between the United Auto Workers (UAW) labor union and the three automobile manufacturers. In addition to providing public and private insurance coverage to retirees, the Trust participates in substantial left-of-center shareholder advocacy, specifically in health care policy and corporate governance.

History

In 2007, the United Auto Workers (UAW) labor union established the UAW Retiree Medical Benefits Trust as a result of collective bargaining agreements between UAW, Ford, Chrysler, and General Motors.[1] Through the agreements, retiree health care liabilities were transferred to the Voluntary Employee Beneficiary Association (VEBA).[2] Following the settlements, the companies signed a Trust agreement to create the UAW Retiree Medical Benefits Trust.[3]

The Trust officially launched in January 2010.[4] Today, the Trust covers over 860,000 members, serving as the largest non-governmental purchaser of healthcare for retirees in the United States.[5] The Trust works to control health care costs, providing plans through both Medicare and private insurance through Blue Cross Blue Shield on a cost-sharing basis.[6] The Trust also works as a shareholder advocacy organization, pushing left-of-center policies in corporate governance, transparency, and health policy.[7]

Shareholder Advocacy

In addition to working to provide health care for retired auto workers, the UAW Retiree Medical Benefits Trust engages in shareholder advocacy, pushing for a range of left-of-center policies regarding corporate governance and healthcare.

Corporate Governance and Transparency

The UAW Retiree Medical Benefits Trust is active in pushing left-of-center policies in corporate governance, specifically in the movement to increase the presence of racial and ethnic minorities on corporate boards.[8] The Trust is a leading member of the Midwest Investor Diversity Initiative, a group of eleven labor union and pension funds dedicated to pushing for racial diversity in corporate governance supported by a total $750 billion in assets.[9] As of 2019, the Initiative has gotten 24 companies across the Midwest to agree to adopt interview practices that create quotas for racial minority and female representation in interviewing for top positions.[10]

The Trust has also been active in pushing for limits to executive pay. In June 2019, shareholders supported a Trust proposal for Mylan, a pharmaceutical company, to strengthen its claw-back policies, encouraging the company to recoup incentive pay that has already been granted in case of senior executive misconduct.[11]

More generally, the Trust has joined the left-of-center Human Capital Management Coalition (HCMC) to push for mandated disclosures of labor information from large companies.[12] HCMC has 26 institutional investors backed by $2.8 trillion under management.[13] The coalition has pressured companies to publicly disclose human capital data in 23 metrics, including employee grievances filed, employee trust in leadership, and total workforce costs.[14]

Health Care

The Trust is involved in shareholder advocacy regarding health policy, specifically focusing on lowering drug prices. In February 2019, a legislative consultant on behalf of the Trust testified before the Ways and Means Committee in the United State House of Representatives.[15] The consultant argued that Congress should regulate drug advertising, allow Medicare to negotiate prescription drug prices, and link the price of insulin to federal price ceilings.[16]

The Trust has also been involved in shareholder advocacy surrounding the opioid crisis, serving as one of the two founding organizations of Investors for Opioid Accountability, a group of at least 47 investment organizations backed by more than $2.2 trillion in total assets.[17] In 2018, the coalition filed resolutions to regulate pharmaceutical companies and force deeper analysis of opioid risks against ten companies, including Johnson & Johnson, AmerisourceBergen, and Cardinal Health.[18] Cardinal Health responded by agreeing to form a committee on opioid business risks, in addition to providing investors with reports on opioid distribution.[19]

People and Funding

As of December 2017, the Trust’s net assets amounted to approximately $61.3 billion.[20] In 2017, the Trust spent over $4.2 billion in paying our benefits for retiree health care programs and administrating the plans themselves.[21] The Trust is funded by separate accounts established through class action settlements with Chrysler, General Motors, and Ford totaling approximately $59 billion, which the Trust has subsequently invested in various corporations.[22] The Trust is operated independently from the auto companies and from the UAW union, governed by an eleven-person committee consisting of six independent members and five appointed by the UAW labor union.[23]

In spite of well-performing investments, the Trust faces uncertainty in its ability to fund future expenses for Trust members.[24] In 2015, new accounting assumptions revealed that the Trust’s projected obligations total nearly $80.9 billion, resulting in a projected shortfall of nearly $20 billion.[25]

Robert Naftaly is the current chairman of the Trust.[26] Naftaly is a retiree with a long career in upper management at Blue Cross Blue Shield of Michigan.[27] In 2019, Naftaly gave four political donations totaling $2,500 to Democratic candidates, including former Vice President Joe Biden.[28]

References

  1. “History of the Trust.” UAW Trust. Accessed February 25, 2020. http://www.uawtrust.org/history. ^
  2. “History of the Trust.” UAW Trust. Accessed February 25, 2020. http://www.uawtrust.org/history. ^
  3. “History of the Trust.” UAW Trust. Accessed February 25, 2020. http://www.uawtrust.org/history. ^
  4. “History of the Trust.” UAW Trust. Accessed February 25, 2020. http://www.uawtrust.org/history. ^
  5. “History of the Trust.” UAW Trust. Accessed February 25, 2020. http://www.uawtrust.org/history. ^
  6. “Non-Medicare Benefits & Plans.” UAW Trust. Accessed February 25, 2020. http://www.uawtrust.org/non-medicarebenefitsandplans. ^
  7. “Media Center/” UAW Trust. Accessed February 25, 2020. http://www.uawtrust.org/mediacenter ^
  8. Dingle, Derek T. “Power In The Boardroom: Blacks in Corporate Governance.” Black Enterprise, February 19, 2020. https://www.blackenterprise.com/power-in-the-boardroom-corporate-governance/. ^
  9. Dingle, Derek T. “Power In The Boardroom: Blacks in Corporate Governance.” Black Enterprise, February 19, 2020. https://www.blackenterprise.com/power-in-the-boardroom-corporate-governance/. ^
  10. Dingle, Derek T. “Power In The Boardroom: Blacks in Corporate Governance.” Black Enterprise, February 19, 2020. https://www.blackenterprise.com/power-in-the-boardroom-corporate-governance/. ^
  11. Beard, David. “Incentive Pay Part of Mylan’s Annual Meeting.” WV MetroNews, June 22, 2019. http://wvmetronews.com/2019/06/22/incentive-pay-part-of-mylans-annual-meeting/. ^
  12. McCann, David. “Human Capital’s Big Reveal.” CFO, September 11, 2019. https://www.cfo.com/human-capital-careers/2019/09/human-capitals-big-reveal/. ^
  13. McCann, David. “Human Capital’s Big Reveal.” CFO, September 11, 2019. https://www.cfo.com/human-capital-careers/2019/09/human-capitals-big-reveal/. ^
  14. McCann, David. “Human Capital’s Big Reveal.” CFO, September 11, 2019. https://www.cfo.com/human-capital-careers/2019/09/human-capitals-big-reveal/. ^
  15. “Testimony of UAW Retiree Medical Benefits Trust by Alan Reuther, Legislative Consultant.” United States House of Representatives Committee on Ways and Means. February 12, 2019. https://gop-waysandmeans.house.gov/wp-content/uploads/2019/03/20190212-Alan-Reuther-Testimony.pdf ^
  16. “Testimony of UAW Retiree Medical Benefits Trust by Alan Reuther, Legislative Consultant.” United States House of Representatives Committee on Ways and Means. February 12, 2019. https://gop-waysandmeans.house.gov/wp-content/uploads/2019/03/20190212-Alan-Reuther-Testimony.pdf ^
  17. Evans, Elizabeth Eisenstadt. “To Stem Opioid Crisis, Investment Coalition Pressures Supply Chain.” National Catholic Reporter, October 15, 2018. https://www.ncronline.org/news/people/stem-opioid-crisis-investment-coalition-pressures-supply-chain. ^
  18. Evans, Elizabeth Eisenstadt. “To Stem Opioid Crisis, Investment Coalition Pressures Supply Chain.” National Catholic Reporter, October 15, 2018. https://www.ncronline.org/news/people/stem-opioid-crisis-investment-coalition-pressures-supply-chain. ^
  19. Evans, Elizabeth Eisenstadt. “To Stem Opioid Crisis, Investment Coalition Pressures Supply  Chain.” National Catholic Reporter, October 15, 2018. https://www.ncronline.org/news/people/stem-opioid-crisis-investment-coalition-pressures-supply-chain. ^
  20. “2017 Annual Update.” UAW Retiree Medical Benefits Trust. December 2017. Accessed at http://uawtrust.org/AdminCenter/Library.Files/Media/501/Trust%20Documents/Docs/Summary%20Annual%20Report/18sarchr.pdf ^
  21. “2017 Annual Update.” UAW Retiree Medical Benefits Trust. December 2017. Accessed at http://uawtrust.org/AdminCenter/Library.Files/Media/501/Trust%20Documents/Docs/Summary%20Annual%20Report/18sarchr.pdf ^
  22. “2017 Annual Update.” UAW Retiree Medical Benefits Trust. December 2017. Accessed at http://uawtrust.org/AdminCenter/Library.Files/Media/501/Trust%20Documents/Docs/Summary%20Annual%20Report/18sarchr.pdf ^
  23. “2017 Annual Update.” UAW Retiree Medical Benefits Trust. December 2017. Accessed at http://uawtrust.org/AdminCenter/Library.Files/Media/501/Trust%20Documents/Docs/Summary%20Annual%20Report/18sarchr.pdf ^
  24. “Shortfall Rises by $16 Billion at UAW Retiree Medical Benefits Trust.” Pensions & Investments, October 13, 2015. https://www.pionline.com/article/20151013/ONLINE/151019975/shortfall-rises-by-16-billion-at-uaw-retiree-medical-benefits-trust. ^
  25. “Shortfall Rises by $16 Billion at UAW Retiree Medical Benefits Trust.” Pensions & Investments, October 13, 2015. https://www.pionline.com/article/20151013/ONLINE/151019975/shortfall-rises-by-16-billion-at-uaw-retiree-medical-benefits-trust. ^
  26. “Leadership.” UAW Trust. Accessed February 25, 2020. http://www.uawtrust.org/leadership. ^
  27. “Leadership.” UAW Trust. Accessed February 25, 2020. http://www.uawtrust.org/leadership. ^
  28. “Browse Individual Contributions: Robert Naftaly.” FEC.gov. Federal Election Commission. Accessed February 25, 2020. https://www.fec.gov/data/receipts/individual-contributions/?contributor_name=Robert+Naftaly+&two_year_transaction_period=2020&min_date=01/01/2019&max_date=12/31/2020. ^
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United Auto Workers Retiree Medical Benefits Trust


Detroit, MI