Ontario Legislator support for the alternative to wind up by annuity

Reported on the NRPC site:

Yesterday in the Ontario Legislature, MPP Norm Sterling, Carleton-Mississippi addressed the issue of Nortel pensioners on two occasions. Mr. Sterling has over 1000 Nortel retirees in his riding and has been very supportive of our efforts to have the FSM proposal properly evaluated by the Ministry of Finance.

Mr. Norman W. Sterling: To the Legislative Assembly of Ontario:

PETITIONS
Pension plans

“Whereas the Pension Benefits Act (PBA) regulations for ‘loss of sponsor’ of defined benefit pension plans only permit windup and annuity purchase; and “Whereas in the present economic climate the cost of annuities is at a 25-year high with no relief in sight; “Therefore the purchase of annuities exacerbates the punitive impact of windup on Nortel pension plan members and others in similar situations, and increases the costs passed on to the taxpayers of Ontario;

“We, the undersigned, petition the Legislative Assembly of Ontario as follows: “To amend the PBA regulations to permit the Administrator and the Financial Services Commission of Ontario (FSCO) to apply other options in the ‘loss of sponsor’ scenario which will provide more benefits to Nortel pension plan members and others in similar situations, such as the continuation of the pension plan under responsible financial management by a non-government institution.” Mr. Speaker, I agree with that and I sign the petition.

Oct. 4, 2010 Ontario Legislature

Mr. Norman W. Sterling: The member for Kitchener–Conestoga mentioned in her remarks the pension reform that this government has been undertaking. I’m urging the government to undertake even more pension reform, to accommodate the very desperate situation that Nortel pensioners are finding themselves in.

Members of the Legislature will remember that, almost a year ago, I brought forward to this Legislature a bill that would have allowed the Nortel pensioners to have two choices when their pension found was wound up. One was the present option—the only option—and that is to buy individual annuities. I brought forward a suggestion that the pensioner would have the opportunity to also put their funds, or their portion of the funds, into a registered retirement instrument so that they would be able to avoid the very, very low returns that the Financial Services Commission of Ontario is going to get when they buy individual annuities. That was rejected by the government members, the Liberal members of this Legislative Assembly. All members of the opposition supported that particular endeavour.

As well, the Nortel group has been asking the government to undertake their suggestion to establish a financial services model, which has been successful in other jurisdictions.

Needless to say, we need to have this government trying harder for the Nortel pensioners. They will appreciate the small cheque they get from this, because they’re going to suffer so badly from their losses from the bankruptcy of Nortel. But we need this government to go further for the Nortel pensioners.