Those benefits Kodak workers thought would last a lifetime will end December 31, 2012.
A bankruptcy judge approved a settlement between Kodak and the official retiree committee during a telephone hearing Monday.
The hearing had been postponed because of Hurricane Sandy and the U.S. Bankruptcy Court in Manhattan remains closed, so Judge Alan Gropper decided to hold the hearing via telephone at 2pm Monday.
The agreement means an end to most retiree benefits.
However, pensions are not affected.
What is affected are healthcare and life insurance coverage. Retirees who are not Medicare eligible can apply for COBRA benefits starting at $400/month for a single person.
Those who are Medicare eligible have a variety of plans to choose from for extra coverage.
Conversion will be allowed for life insurance benefits so that people can transition from the group coverage to an individual plan.
Survivor income benefits will also end as a part of this agreement.
Kodak says it can't afford to pay $10 million a month for these benefits and successfully get out of bankruptcy.
The company said the cost to cover retiree benefits was 1 current employee for every 7 retirees.
There are roughly 56,000 retirees and spouses.
Under the settlement, the official retirees committee will be given a $7 million cash payment to set up an tax-exempt voluntary employees' beneficiary association trust (VEBA).
Kodak will owe the retirees committee a unsecured claim of $635 million and an administrative claim of $15 million.
It will be responsible for dividing the funds up between all of the retirees.
An attorney for the committee commented during the court proceeding that it has not decided how that will happen, but said it may be used where the need is the greatest (ie. survivor income benefits).
That has not been decided though.
"There are different constituencies, those that have been retired a long time, who are hoping for more survivor benefits and who will get more benefit from this settlement," said George Conboy, financial analyst.
Kodak had this to say this afternoon saying quote:
"Kodak understands and appreciates the contributions of our retirees, acknowledges the difficult and hard work of the 1114 Committee and recognizes that this action will pose challenges. However, this agreement is one of the many necessary and critical steps to put the company on a path to emerge as a profitable, sustainable company."
The 1114 Committee plans to schedule town hall meetings for retirees and offer communication about the next steps.
There are also further healthcare meetings for Medicare eligible retirees at the following locations and dates:
will hold two health care meetings on Tuesday, November 6th, at 2 and
4 pm. in the Auditorium at Strong Museum of Play.
MVP will hold two meetings on November 9th at the Holiday Inn on Brooks Avenue in Rochester. There's one at 9 am. and a second at 11 am. MVP will also hold a meeting the same day, at 2 pm. at the Burgundy Basin Inn.
For more bankruptcy information for retirees you can click on Kodak's website here.