Saturday, October 30, 2010

UK pension wind-up process and document

The Nortel Canadian pension administration has been taken over by Morneau Sobeco and they are in the process of working towards determining the wind-up of the pension fund.

In my research into wind-up on the internet I came across the UK process in the document which can be seen at the link below. The document is very detailed with a lot of clear information on what happens during a Pension wind-up in the UK.

Unfortunately I have not been able to find a document with similar detail on the Canadian process, though I will continue looking.

In the US the registered pension fund was taken over by the PBGC last year and they are administering it and providing pensions as per their rules. Most US pensioners are happy with the process. Some are unhappy since they have had reductions in pension as a result of the PBGC rules. It is possible to determine what happens when the PBGC takes over by examining their site.

Unfortunately in Canada there doesn't appear to be similar clarity and transparency, and as a result many of us are uncertain as to what the actual methodology will be, and how it will be applied. M.S. has placed some summary information on their web-site but it is inadequate to answer many questions posed by pensioners and deferred pensioners as seen on the Yahoo Nortel Pension group site.

The NRPC proposal to extend the life of the fund using alternative methods seems to be a possibility that many of us would prefer, yet the Ontario government and the Canadian Federal government are blocking this approach. Looking through the UK document I see that alternatives to annuities are acceptable in the UK wind-up system.

The Canadian government should do some benchmarking on the US and UK ,at least, and give pensioners better treatment than they currently seem to be doing.

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