Health Benefits May Be Cut For Retirees

By Amy E. Feldman

PHILADELPHIA (CBS) - How secure are your health care benefits after your retirement?

In 2007, GM had contracted with its workers to pay health benefits for retiring workers. When it renegotiated a new contract two years later, it did not include a retiree health benefit. Does a company have an obligation to continue to provide the benefits that were in effect when a worker retired, but that have since been changed in later contracts or plans?

The GM retirees sued for the $450 million in benefits they claim they were promised.

According to the federal judge in GM's case, the retirees are out of luck. Private employers are not required to provide retiree benefits, and federal law does not prevent them from cutting the benefits they do provide UNLESS the company has made a specific promise - or has agreed in a collective bargaining agreement - not to do so.

So, if you're thinking of retirement, how do you know?

You need to look at the summary plan description of your benefit plan. Look for phrases like: the company reserves the right to modify, revoke, suspend, or terminate the program which tells you you should also make other financial arrangements in the event your benefits do get cut, which they might. Keep all documentation related to your benefits and, if you can't figure out what the employer is allowed to do to your benefits, ask a union rep or your plan administrator - or lawyer - to help.