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.

Improvements

The life income benefit, for retirements effective 10-01-03 and
after, 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, for retirements effective 10-01-03 and after, will increase by $290 by the last year of the agreement. With the increases, the 30-and-out benefits will reach $3,020 by 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 towards the purchase of a new Ford, Lincoln or Mercury 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

Life Income Benefit Rate

The Life Income 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 life income benefit rates.

Table 1
For Life Income 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

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 to After
$2,730	$2,805	$2,875	$2,950	$3,020

Temporary Benefits

The temporary benefit, which is paid to disabled 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 special early 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 life income 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.

Retirees, Surviving Spouses Win 4 Lump-Sum Payments

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

Vehicle Vouchers

UAW retirees will receive two vehicle vouchers worth $1,000 toward the purchase of a Ford, Lincoln or Mercury 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 an eligible family member to purchase a vehicle through the company’s “Z” Plan Program.

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 Sept. 14, 1945, and workers born during this period 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 been eliminated.

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 during the years 1976 through 1979, as well as during the years 1986 through 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.