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.

Termination Fund- Koskie Minsky statement

The following statement appeared on the Koskie Minsky site on Nov,1,2010.


November 1, 2010 Termination Fund: Upcoming Payments

The Settlement Agreement that was approved by the Court on March 31, 2010 established a Termination Fund for the benefit of certain Nortel terminated employees who were still owed termination or severance payments. All terminated employees who are eligible for this payment received a letter in September indicating their eligibility and outlining the method of payment.

Please note that cash payments will begin to be made effective October 29, 2010. Some individuals who commenced employment with Nortel prior to 1996 were eligible for a retiring allowance and therefore were provided the option for their Termination Fund payment to be made directly into an RRSP account. Please note that transfers into RRSP accounts are still being processed. Individuals who chose this option should not expect their payment for several more weeks

Nortel US medical plan

Usually by this time of year Nortel US has sent out a document with details of the medical plan for employees and retirees for the following year. So far we retires have not received anything.

Earlier this year Nortel tried to place a motion before the court to terminate the medical plan, but subsequently withdrew the motion when they were faced with a decision in another court regarding the process by which a company in chapter 11 may terminate a medical plan. At the same time the US NRPC had submitted a motion to the court to consider formation of a voluntary employee benefits association (VEBA). That motion was also withdrwn at a later date.

Today I saw a posting on the Yahoo Nortel Pension Group which indicated that Nortel is actually planning to send out plan information. The posting stated:

" I got an e mail from a Nortel HR person indicating that next month
> (Nov) enrollment packages would be sent out. Usually some tweeking of
> benefits takes place as well as a cost increase. NT is a bit late in sending
> out the enrollment this year. I am surprised the plan is still operational."

Hopefully this is going to happen and that we will see a continuation of the Nortel medical plan for retirees.