AK Steel, workers settle on health care creating a $663 million managed trust fund

[Omaha Steve]

http://www.kentucky.com/101/story/197512.html

ASSOCIATED PRESS

AK Steel has agreed to settle a retirees' lawsuit over health care premiums by creating a $663 million managed trust fund. The steelmaker, which has a plant in Ashland, had sought to reduce its costs by requiring retirees from its largest plant to pay premiums.

Who's affected: 4,600 retirees at the Middletown (Ohio) Works mill.

How much is involved: AK will create a $663 million trust fund to be managed by retirees, starting with $468 million in the first quarter of 2008, followed by three yearly contributions of $65 million.

The program: A Voluntary Employees Beneficiary Association trust, or VEBA, similar to ones used in a number of settlements, including those with workers for General Motors. The VEBA means the retirees won't have to contribute to premium costs.

Still to come: The settlement must be approved by a federal judge in Cincinnati, where retirees sued in July 2006.