Saturday, December 22, 2012

Canadian OAS

As a Canadian living for many years in the USA I had not considered applying for a Canadian Old Age Security pension, thinking that the claw back clause would probably eliminate most of it. I also wondered if it would have an impact on my US Social Security. However when I called Service Canada last year they urged me to apply and said that I would receive the benefits I was entitled to without clawback or impact on Social Security. I did apply and it took about a year to finalize but I am happy to say that I am now receiving $245 per month that I wasnt before. Also, since it is a government pension which I didn't specifically contribute to, it is paid out of general taxes, it is not considered in terms of the USA Windfall Provision on Social Security. Much of this is because of the treaty between Canada and the USA on pensions. To be eligible for OAS one has to have resided in Canada and paid taxes for 10 years after the 18th birthday. If you live outside Canada you need to have 20 years to receive the pension. Since there is a treaty with the USA, Canada takes into account the time residing in the USA as well. For example I lived in Canada for nearly 19 years and then 27 years in the USA, so I was eligible to receive the OAS. To calculate it they take the ratio of the number of years you resided in Canada to 40 years, which is the maximum number, and multiply it times a dollar amount. In my case that worked out to $245 per month. Then they calculate any back payments to your 65th birthday and send you the money. It's worth looking into and applying for. Tom

Thursday, August 9, 2012

Impact of WEP on Spousal benefits

Recently my wife applied for social security benefits. She applied under the provision that provides benefits to a spouse based on their partner's work experience. This is certainly a useful source of income and one that every married couple should take advantage of. I am not sure if it apples to common law partners but is worth checking. There are a few things that everyone should know. The spousal benefit is based on the workers full retirement age PIA (primary insurance amount). Some of the Social Security agents are not familiar with that and may try to argue that the spouse's benefits are based on the worker benefits which may have already been reduced if the worker has retired early. That is not the law. The law is clear that the spouse is entitled to half of the workers PIA amount if the pension is taken at the spouse's full retirement age. The spouse may also apply early from 62 years of age or later, but, in that situation,the spousal benefit is then reduced by the defined Social Security percentages based on the age the spouse is when she or he applies. A second impact is the Windfall Elimination Provision. If a worker has a second source of pension income from a government entity that did not contribute to Social Security then the worker's social security benefit is reduced up to a maximum amount. Check the social security website to find the impact based on your age. This situation applies for example if you are receiving a Canadian pension such as CPP as well as Social Security. However it does not apply to Canadian OAS since this old age pension falls into another category altogether. The US Social Security people are fully aware of Canadian CPP and QPP and will deduct overpayments from your social security pension if you do not make them aware of your other pension. I know it doesn't sound fair but that is the way the law works, and S.S. will find out eventually if you don't let them know and then you will owe a large amount back to them. The WEP also affects Spousal benefits from Social Security. When a worker has both pensions the worker's PIA is reduced by the Windfall Elimination Provision and that then has a direct effect on the spouse's pension. I dont understand the logic of that part of the WEP law if the spouse does not obtain extra income from the worker's other source of pension. It appears to be a double whammy to me and I plan to write to my congressman regarding this inequity. In the mean time the law applies and so I am posting this informaton so that others may know what to xpect if they encounter this situation.

Tuesday, August 7, 2012

US Retiree welfare plan termination

Docket 8066 is a motion by Nortel US to terminate the US retiree welfare benefits plan on Dec 31 2012. Nortel claims that they have followed all the legal requirements of section 1114 of thc code and that time has run out. The trial date is in early November and from what I have read of the various motions prior to this the court will probably grant approval. Healthcare benefits, long term care, life insurance benefits etc will cease on Dec 31 2012.

Thursday, April 19, 2012

Foreign income reporting on US Tax Return

A note on the NRPC site and also on the Yahoo Nortel pension group mentioned a new form 8938 which needs to be completed by US residents who have a financial interest in foreign banks or funds or trusts. The form is in addition to the Treasury form that needs to be completed and filed with the US treasury department. Turbotax supports this new form 8938.

You need to indicate on the software that you have foreign income or a foreign financial interest and then complete the form. You need to actually fill in the details on the form. Easystep will not take you through it.

I only found out about this new form yesterday which is unfortunately after the filing date of April 17th. If you are in the same boat you can file an amended return. Again Turbotax will guide you through that process.

If you have a bank account or RRSP or trust in Canada which is over $50,000 ($100,000for married filing jointly) you need to complete the form.
Also if you receive a pension from a Canadian company like Nortel, you need to complete the form.

You do not need to complete the form for CPP or OAP from Canada. Foreign Social Security payments like the CPP or QPP are exempt.

The form asks for a number representing the maximum value of the account during the year. For pensions, from what I can tell, you can use the total pension paid to you for the year, converted to US dollars. Check the instructions at


Friday, April 6, 2012

Nortel Mediation Process

The following web site has been created to cover the Nortel mediation process:

Here's the latest information from the web site:

The Nortel Mediation

In June 2011, Justice Geoffrey B. Morawetz of the Ontario Superior Court of Justice and Judge Kevin Gross of the U.S. Bankruptcy Court in Wilmington, Delaware, ordered all parties to the bankruptcy proceedings of Nortel Network Corporation to seek mediation while they prepare their decisions on motions seeking the allocation of Nortel's assets, heard earlier in the month.

The Honourable Warren K. Winkler, the Chief Justice of Ontario, was appointed mediator.

On March 26, 2012, Chief Justice Winkler announced in a letter to parties that an introductory mediation session will be held on April 24, 2012, at the Metropolitan Hotel, 108 Chestnut Street, Toronto, Ontario, commencing at 10 a.m. The mediation meeting will begin with a plenary session at which the mediation process will be outlined. Short private meetings with the parties, limited to 30 minutes, will follow. To arrange a private meeting, parties should contact Randy Bennett of Rueter, Scargall Bennett LLP

This website has been created to provide information about the mediation being conducted by Chief Justice Winkler.

Sunday, February 26, 2012

Keeping tabs on the legal costs

I looked at the Epic Systems record of US court proceeding to see if there is any progress whatsoever and as usual the majority of the docket record is the compensation to law firms and executives. Is anyone keeping tabs on that? Perhaps in Canada the Monitor should be able to tell us what the tab is so far for these legal beagles. I woner if anyone is looking at it and generating a report for the US and other countries. These people are eating into our assets and enjoying the free ride. Surely there should be public disclosure of the money being funneled to these firms? Also are there any results achieved by this amount of legal attention? I sure don't see any.


Friday, February 24, 2012

Time drags on

It seems like forever since Nortel declared bankruptcy. Since then thousands of us have felt the pain of lost pensions and benefits and yet the case drags on with only the lawyers benefiting.

What a miserable 3 years it has been.

Loss of non qualified pensions.
Loss of benefits.
Shameful rejection of the disabled employees.
Cuts in pensions.
Continuous anxiety and depression over the loss of income.

Why arent we getting some movement on the mediation and distribution of the assets?

We are all getting older and some have already lost the opportunity to enjoy any payout from this despicable situation.

Time for the judges and lawyers to get their act together and complete this so we can move on with our lives.