General Motors of Canada Ltd. has agreed to pay $9-million to nearly 3,300 salaried and executive retirees and restore most of their post-retirement benefits to prefinancial crisis levels, a media report says.
The proposed agreement would settle a lawsuit launched on behalf of the retirees, who saw their health and life insurance benefits cut or eliminated by GM during the automaker's major restructuring in 2008 and 2009.
A spokesperson for General Motors said the company couldn't comment at this time.
The deal comes a year after a Superior Court of Justice ruled in favour of the salaried and executive retirees, finding GM did not have the contractual authority to reduce their health care and life insurance benefits after they retired.
The settlement, which must still be approved by a judge, does not cover GM's hourly retirees, who reached a separate deal with the company through their union in 2011.
The Toronto Star says the $9-million GM has agreed to pay will go into a fund to be used to compensate retirees for losses incurred between the time the benefits were cut and the settlement was reached. The deal applies to employees who retired between 1995 and 2011.
The two sides finalized the negotiated settlement on Wednesday. The proposed settlement goes before a judge on Aug. 7 for approval.