Wednesday, February 24, 2010

Nortel's timing for handing over control of the Canadian Pension

For Canadian retirees and ex-employees. Nortel has indicated in a letter to the Financial Services Commission of Ontario, and the Pension Benefits Guarantee Fund of Ontario, that they intend to hand over all documents related to the Pension starting March 31st 2010 and will no longer administer the plan after September 31st 2010.

The letter may be found at the Monitor's site (Ernst & Young) at

Look under Employee Settlement Document Package, then under additional documents and select Motion Record Settlement Agreement. Schedule C of this document is the letter signed by Nortel's representatives John Doolittle and Anna Ventreska regarding their intentions for the pension trust fund and plan administration during 2010.

The letter, dated Feb 8th 2010, is directed to K. David Gordon, Deputy Superintendent, Pensions at the PBGF (Ontario).

So this should dispell any doubts about what's going to happen to the pension this year. It will be wound up.

Nortel's plan is to be out of the Pension responsibility by Oct 1st 2010 and they will hand over records and documents to the administrator starting March 31st 2010. Nortel indicates that they will not initiate wind up until the Sept 30th date providing the employee settlement agreement is approved on March 3rd. If that doesn't happen, it is likely they will advance the wind up, probably to March 31st. (my opinion)

During the period up to Sept 30th, Nortel will continue to administer the plan and will bear the costs of that activity.

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