History and Purpose of asrTrust

History and Purpose of asrTrust

In addition to negotiating the legal establishment of the trusts, the independent steering committee at GM faced an additional challenge: attempting to negotiate additional financial support from GM, in recognition of the underfunded status of that trust (which was due to the government-imposed cap on the company's liability).

These negotiations were successful, and GM eventually agreed to pay an additional $260 million into the new fund (over and above the payments negotiated by the CAW), along with other favourable changes in the funding of the trust.

The trusts were legally established as the outcome of a class action lawsuit, which ended up absolving the two companies of their obligation to pay retiree health benefits in return for the agreed schedule of payments into the two trust funds.

The trusts were initially funded with up-front cash contributions from each company (worth $1 billion for GM and $175 million for Chrysler). Subsequent payments into the trust from both companies will take place in stages over the next several years.

The health care trust (officially named the Auto Sector Retiree Health Care Trust, or asrTrust) came into existence for Chrysler Canada retirees on January 1, 2011. In GM's case, the Trust came into existence on November 1, 2011. The Trust is governed by a Board of Trustees, who are legally mandated to manage the Trust (including its investments, its payout of benefits, and its administration) solely in the interests of current and future retirees of both companies.