Continental Tire must fund VEBA — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Continental Tire must fund VEBA

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Charlotte-based Continental Tire North America has agreed to pay $158 million into a Voluntary Employees’ Beneficiary Association, or VEBA, to continue health care benefits for approximately 2,400 retirees and workers.

The workers sued after Continental reduced retiree health care benefits and instituted a $3,000 annual cap on health care spending in March 2007.

Not so fast, a federal judge ruled in July 2007, saying the company had no right to reduce or terminate benefits. The company will pay $3 million in back compensation to the plaintiffs, and fund the VEBA with $40 million up front and an estimated $115 million in future liability payments.

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