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him as chair of an earlier, 
much smaller VEBA trust that 
administered dental benefits 
to union retirees.

AUTOMOBILE SLUMP
IMPERILED RETIREES
Health benefits — with the 
specter of bankruptcy loom-
ing — was a whole different, 
larger and more complex 
undertaking.
“The auto industry and 
the union had a common 
problem” in 2007, Naftaly 
recalled. “They were worried 
about who would pay for the 
health care of their workers, 
and they were also worried 
about the future viability of 
the companies” if the auto-
makers became insolvent.
“Workers needed protec-
tion, and everyone needed 
to get the liabilities off the 
automakers’ books.”
The VEBA trust option 
had existed in the U.S. tax 
code for decades — though 
no company or industry had 
ever attempted one as large. 
Following federal judicial 
approval, the UAW and the 
auto industry were handed 
an 18-month deadline to 
structure the organization, 
which today employs 127 
people. It was a massive task 
at a moment when the auto-
makers’ financial prospects 
were growing dimmer by the 
day. GM and Chrysler did 
file for bankruptcy in 2009 
and were reorganized by the 
U.S. Treasury; Ford narrowly 
avoided it.
“This was a huge mission, 
taking on the health care 
responsibility for hundreds of 
thousands of people,” Naftaly 
said. “
Almost like setting up a 
new insurance company from a 
blank piece of paper. We need-
ed lots of specific expertise.”

Naftaly appor-
tions great credit 
to Dan Sherrick, 
then the UAW’s 
General Counsel, 
for writing 
the agreement 
between the 
UAW and the 
auto companies, 
and to Fran 
Parker, who had 
recently retired 
from HAP and 
became the 
Trust’s first hire and CEO. 
“Dan knew the legal 
aspects. I knew finance and 
governance. Fran tackled the 
job of putting together the 
operations team,” Naftaly said. 
“From a staff perspective, 
the chaos in the economy, 
the recession, worked in our 
favor. It was a good time to 

hire good people with exper-
tise in health care. We hired 
actuarial experts, built a 
governance structure for the 
board. We were juggling a lot 
at the same time. We were 
being watched. We had to be 
ready to serve the retirees and 
their families. A lot of people 
were depending on us to do 
this right. We could not afford 
to miss the launch date of Jan. 
1, 2010.”
Many retired auto work-
ers, some not yet old enough 
for Medicare coverage, were 
terrified that they and their 
families would be deprived 
of health care. Skeptics won-
dered if the VEBA would fly, 
given the automakers’ miser-
able financial condition and 
the abundance of creditors.
“Once bankruptcy hit, 
there was a reluctance by 

some to help us complete the 
job,” Naftaly said. “Just one 
example, the company we 
had hired to determine the 
eligibility of Trust members 
suddenly dropped us before 
finishing its work.”
Naftaly had navigated many 
financial predicaments over 
the years; he knew indecision 
wasn’t an option. 
The Trust, inaugurated at 
the start of 2010, was immedi-
ately responsible for providing 
health care to 872,000 eligible 
retiree members in all 50 
states. The original funding 
had to be adjusted due to the 
bankruptcy and looked far 
less certain than the amounts 
originally agreed upon. 
During Naftaly’s 12-year 
tenure, the Trust’s investments 
have prospered thanks in part 
to a flourishing stock market 
— as of 2019, assets were $60.3 
billion — and thanks to the 
prudent purchasing of benefits. 
The Trust, which operates 
totally independently from 
the union and automakers, 
covers members from retire-
ment through the end of 
their lives. Current member-
ship of eligible retirees and 
dependents, as expected, has 
declined to 594,277. An addi-
tional 67,000 active workers 
and their eligible dependents 
will have access to Trust cov-
erage when they retire.

FINANCIAL SAVIOR
IN THE MAKING
For Naftaly, who grew up in 
Detroit and attended Central 
High School, his UAW Retiree 
Medical Benefits Trust role 
represents the latest highpoint 
during a long and distin-
guished career in financial 
management, health care and 
public service. He can’t say 
he always was aimed in this 

Fran Parker

Dan 
Sherrick

“THEY WERE WORRIED ABOUT 
WHO WOULD PAY FOR THE 
HEALTH CARE OF THEIR 
WORKERS AND THE FUTURE 

VIABILITY OF THE AUTOMAKERS.”

— BOB NAFTALY