Retirees communications.

It seems like once you are retired you no longer exist in the eyes of your old company; out of sight-out of mind. After I retired I managed to keep up correspondence with some of my friends and colleagues at Nortel, but over time that diminished and settled down to a small number of people whom I was close to at work. Information from the company was generally one way. I received my pension check, albeit from Nortel’s outsourced administration arm, and I also received annual renewals of the medical plan and the company’s annual report. I wrote officially a few times to the company and received one response in the early years after I retired. Since then it has been a deafening silence.

I watched from afar as Nortel faltered in the early part of the new century, and although there were furious discussions internally I was not involved in any way. Nor were any of my fellow retirees. I thought that strange, after all when we worked at Nortel we were always having communications sessions. We were a communications company after all, and prided ourselves on the information flow up and down the ladder. Maybe it wasn’t flowing quite as well as we thought at the time.

I wrote to various presidents and CEOs offering to help, for free. I suggested that the retiree population would be only too glad to help where they could to reduce costs and bring the wisdom and experience of many years to help the company back onto its feet. No answer. No form letter. Nothing! What a shame. I was disappointed and dismayed. I know that many retirees would have volunteered to assist and take some of the load and cost of the shoulders of the company but it fell on deaf ears.

Since Nortel went into chapter 11 the level of communications inter-retiree has increased exponentially. There have always been some people who, like me, were worried about Nortel’s health and future, and we belonged to a group established on Yahoo: http://finance.groups.yahoo.com/group/Nortel_Pension/. Once the bankruptcy was declared, people flocked to that group and out of it emerged the group in Canada that is representing the pensioners in their case against Nortel. The Nortel Retirees Benefits Protection Committee (NRPC) in Canada quickly gained membership and became a major force in protecting retiree’s rights in Canada. Their web site at www.nortelpensioners.ca provides a wealth of data and information. This group has filled in the huge void that existed in communications between ex-Nortel employees and retirees. Also by virtue of their efforts to engage legal representation using the firm of Koskie Minsky, www.kmlaw.ca, they have forced Nortel to start talking to the retirees and providing information.

In the US a similar committee was formed and also provided a central place that shared information with retirees and ex-employees: www.nnra.org. As discussed in earlier posts, the situation in the US is different to that in Canada and as a result the demand to obtain and use legal representation has not been as large. As more people realize the true impact bearing down on them, that may change.

During all this activity by the ex-employees and retirees, Nortel has avoided informing us about the situation and the possible impacts on us. There have been a variety of internal information sessions at which the senior management has attempted to soothe the inner turmoil and calm the waters. The story has altered as time moved along and more people were laid off. From exhortations to the remaining employees to work hard to help restructure the company, the message has moved to one of selling off the assets and liquidating. But none of this was communicated to retirees. It was only through the assistance of current employees who felt obligated to tell their friends outside that we found out what was being said.

The most recent events were two General Information Sessions held on July 6th 2009 to discuss Pensions. These events were made available to employees on a conference call, but no retirees were invited. Some people out side the company were able to dial in having obtained the access information from friends. I was given some feedback on the US session and I am including it here so that everyone can see it. Is this what is has come to, that such a great company as Nortel is too embarrassed or ashamed to invite the retirees to sessions that directly pertain to them? As it turned out there wasn’t a lot of information that we didn’t already know, except for the news that the Director of Pensions is jumping ship just before the hull settles under the water.

Here is the feedback I was given from the US session:
With respect to the U.S. pension plan. We’re still in a wait-and-see mode for the PBGC. From the tone of the comments it is clear that a PBGC takeover is inevitable.
The transfer to Northern Trust of $3.7M (the actuarially required contribution) will be made on July 15 as scheduled.
The U.S. plan was 74% funded as of January 1, 2009 with an asset allocation of about 50% equities, 50% bonds. (The 74% has no impact on payouts, by either Nortel or PBGC, although it could factor into continued restrictions on lump-sum distributions if Nortel should somehow emerge from bankruptcy intact.)
Employees in scope of business divestitures will generally be treated as terminated Nortel employees, with respect to the Nortel pension. Acquiring companies are NOT assuming liability for Nortel pensions.
Anyone with a non-qualified pension benefit should file a claim with the U.S. bankruptcy court.
If Nortel should cease to exist, retiree medical and COBRA are likely to stop. What would happen to the Hewitt contract for 401K administration is unclear, but there would be some kind of termination and distribution process for the 401K.
The Director of Pensions, is leaving the company next week. Leila Wong will take over administration of pensions.