A federal judge on Tuesday granted preliminary approval of an agreement between General Motors and the United Auto Workers that would establish a health benefit trust for union retirees called a voluntary employees' beneficiary association, the AP/Houston Chronicle reports. U.S. District Judge Robert Cleland praised GM and UAW for their cooperation on the agreement.

Under the agreement, part of the contract negotiated last year, GM would contribute between $33 billion and $36.5 billion to the VEBA, which will reduce retiree health benefit liabilities for the company by about $46.7 billion. The VEBA would become operational as early as Jan. 1, 2010, and would cover about 500,000 GM retirees and their spouses. An 11-member committee would manage the VEBA, with five members selected by UAW and six members appointed by the court. Health benefits for UAW retirees would remain unchanged through 2011, at which time the committee would have the authority to regulate them.

GM retirees and employees affected by the agreement will receive information on the VEBA by March 28, and Cleland will hold a hearing to consider the fairness of the agreement on June 3 (AP/Houston Chronicle, 3/5).

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