Wednesday, November 3, 2010

Canadian Pension Wind-Up process

The following information is taken from the Morneau-Sobeco, (administrators for the Nortel pension fund), web site for Nortel pensioners. This indicates that a wind-up date has not yet been established. The date will be determined after M.S. have examined all the assets and liabilities and will be included in a report and recommendation to the pension regulator. At this point I assume M.S. are working to assure themselves that they know the full value of the assets, and what the total pension liabilities are for the funds.

One item that is not clear is the inclusion of any payout from the remaining Nortel estate. If there is a percentage payout on our pension claim it will be added to the pension funds assets and used in determining our final reduced pensions. I don't see how a wind-up date can be established until that payout is defined by the bankruptcy court, which may take years to finalize.

Morneau Sobeco Information:

The Wind Up Report
As part of the wind up process, we will submit a recommendation to the appropriate regulatory authority depending on where the pension plan is registered to prepare an order that the pension plan be wound up.

Based on the approved wind up date(s), a final Wind Up Report will be prepared and submitted to the appropriate regulatory authority for their review and approval.This Wind Up Report will contain all members’ final pension benefit entitlements in the pension plan and their individual PBGF coverage, if applicable.

Option forms
Once the Wind Up Report has been approved, we will prepare personalized option forms for each member and former member who is not yet receiving a monthly pension payment from the pension plan.

The personalized option form will set out the pension benefit entitlement and the settlement options available to the member in accordance with the pension plan documents and the applicable legislation and regulations. The member will have an opportunity to advise us of any data corrections that should be made.

Purchasing annuities
In the final stages of our wind up administration, we will purchase annuities through a bidding process from one or more Canadian life insurance companies for pensioners and members who choose the pension option in accordance with the provisions of the pension plan documents and the applicable legislation and regulations.

All pensioners and affected members will be notified of the amount of their monthly annuity and the contact information for the successful insurance company. There will be no interruption to monthly pension payments during the transition period.

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