If you are fortunate to have retiree medical benefits, buried somewhere in the plan document are words similar to these.
Plan Amendment or Termination
The Company expects to continue the Retiree Medical Plan. However, it reserves the right, subject to contracts to which they are party, to amend, modify, or terminate the Retiree Medical Plan.
The Company specifically reserves the right to alter, amend, increase, decrease, or terminate such benefits to the full extent permitted by law at any time, in its sole discretion.
If the Retiree Medical Plan is terminated, you will not have any further rights—other than the payment of benefits for expenses incurred before the Retiree Medical Plan was terminated. The amount and form of any final benefit you or your beneficiaries receives will depend on any contract provisions affecting the Retiree Medical Plan and the plan sponsor’s decisions.
If the Retiree Medical Plan or any coverage option under the Retiree Medical Plan is terminated for any reason, you must file any eligible claims within 12 months of termination. The Company is not responsible for outstanding claims not filed within this time frame.
Seems a bit one-sided does it not? In other words, you may have worked for decades for a company being told and not questioning that when you retired you would receive a certain set of benefits. You were probably told your future retiree benefits were part of your total compensation, you may have received an annual benefits statement touting the total value of your pay and benefits including future benefits in retirement.
In fact, there is no obligation whatsoever for the company to honor what any reasonable person would perceive as a commitment, if not a promise. The law is on the employer’s side because of the above words, not yours. And, in most cases not even a labor contract will protect you. After you retire, you are not a represented union member and what may have been negotiated on your behalf regarding retiree benefits may not matter.
Some people believed these types of plan provisions would only be enacted in times of severe financial hardship, bankruptcy or survival type stuff. Think again; a drop in earnings per share, a cost cutting crusade, a word from a consultant, poor stock performance for a period of time, an executive trying to make a name for himself or herself and bazinga, your life and retirement changes. These corporate cowards look first to the most vulnerable, defenseless population at their mercy, the retired employee, the non-productive liability.
QUINNSCOMMENTARY 
No, no, a thousand times no. Yes, I have retiree medical from my former employer. The difference is, my employer always planned to continue coverage, and after confirming that, I had then- current leadership fund their promise with a 401h account.
Promises without funding, especially promises with legal caveats are mere dreams.
Your employer could have vested the benefit. They could have funded it. They could have included it in the utility rate base. That they did not only confirms their intent to someday act on their deliberate reservation of rights when the then current (future) leadership so decides.
You are getting what they promised, a benefit that may someday end. So am I, should funding be exhausted.
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Did you see the New York Times article on $2 billion of unearned pension payments in Detroit … Including payments to active ee’s … Because “they looked like they needed money”!!!!!!!!
Jack
Sent from my iPad
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I didn’t, but how outrageous can it get?
Dick
Richard D Quinn
Blog http://www.quinnscommentary.com Twitter @quinnscomments
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One more time … pension and retiree medical promises without funding are mere dreams.
Employers have little reason to terminate fully funded legacy plans.
Nothing stops an employer from agreeing to vest retiree medical and committing to maintaining the current pension formula prospectively – all they need to do is utter the magic words.
So, bottom line, they never funded nor promised that retiree medical would not change – and if they had, nothing stops the individual from attempting to enforce the promise – particularly now that we are in the post – CIGNA v. Amare world of equitable remedies.
Bottom line, the employer never funded nor promised the defined benefit nor retiree medical in such a way that remove the ability and the financial incentive to change the plan once they ran into financial “difficulty”.
If you demand European style benefits … typically “vest” to those promised, including future accruals, employers will promise little or nothing.
Neither system/process is perfect.
Finally, nothing stops the worker from demanding a written, individual, contract that would commit the employer to maintain the existing formulas/benefits. The contract may not be enforced within a qualified plan, but written contracts are enforced everyday.
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Give them the best 40 years of your life and when you need it the most, they pull the rug out from under you.
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