Today is the last day Nortel administers our Canadian Pension. As of midnight tonight Nortel ceases to administer the pension and washes its hands of retirees and future retirees.
The US retirees have already been transferred over to the federal pension insurance corporation, (the PBGC), and many Nortel US retirees have continued to receive their pensions without major interruption. Some US pensioners have seen a reduction due to the PBGC rules and some have suffered quite huge reductions due to the pension contracts they held with Nortel that were terminated when Nortel filed chapter 11 in January 2009. But in general Nortel retirees in the US are very happy that they had the PBGC to pick up when Nortel failed to deliver
Many US retirees also lost their non-qualified pension benefits and now sit waiting for their claims to be considered by the courts, a process that might take years and might only yield cents on the dollars owed to them.
In the UK most retirees were covered by the PFF, another National Insurance plan that provided some security to pensioners as they faced the bankruptcy of their former employer.
In Canada however, there is no national Canadian pension insurance scheme. Pensioners are left to fend for themselves.
Only in the Province of Ontario is there any form of protection, and that only works up to a maximum of $1000 per month. A total that is far below what many people will need to live dignified reasonable lives after retirement.
Tomorrow an appointed administration company, Morneau Sobeco, will take over administering the pension. For now the pension payments will probably continue as is for a while, (2 -3 months maybe). During that time M.S. will examine the assets and liabilities of the pension trust fund and determine the funded ratio. At that point pensions will be reduced. Currently the estimate, provided by Mercer on behalf of Nortel, is a reduction between 28% and 36% depending on the decision on whether to continue indexing or not.
Following that stage, if there is no change in the Federal and Provincial regulations, the pensions considered Ontario pensions will be converted to annuities for each individual. That conversion may result in further reduction and once in place will be locked in for the life of the pensioner and any survivors who are owed a pension.
The annuity rates are currently at an all time low, so the prognosis is grim.
In at least one other province, Quebec, action has been taken to offer alternatives to this dismal plan. As of yet Ontario has not yielded and continues to drive Nortel pensioners towards this future that offers little return for the years of devotion to their jobs at Nortel and basically guarantees that there will be massive reductions to the pensions they were promised.
Canada contrasts dismally to the US, the UK,and many other countries, in terms of pension protection, yet for some reason the Federal and Provincial governments and the general public at large have ignored this issue and turned their backs on seniors facing this big problem. Shame on them all.
Thursday, September 30, 2010
Tuesday, September 28, 2010
John Tyson Letter re Nortel Canadian Pensioners' plight
John Tyson has written a number of letters regarding the shameful treatment of Nortel Canadian pensioners. This latest letter was published in the Ottawa Citizen on Monday Sept 27th.
Some cared, but not enough to help Nortel pensioners
The Ottawa Citizen September 27, 2010
John F. Tyson writes that it will take special intervention to help Nortel pensioners.
Nineteen months have passed since Nortel filed for bankruptcy protection, the largest in Canadian history. Without provincial and federal government intervention before Sept. 30, the 20,000 Nortel pensioners and long-term disabled will see their pension wound up and forced into annuities, cut by more than 36 per cent, and the end of all health and life insurance benefits by year end.
Without government intervention, they will be abandoned as human sacrifices to the unconscionable harm inflicted by current bankruptcy laws on private sector employees. I am one of them.
During that time, it seems as if I have been pushing-on-a-rope, and in spite of everything tried, I have been unable to find the spark that would ignite the fire within provincial and federal politicians.
The unanswered question is always the same -- why not? Perhaps it's because the intended audience cannot comprehend "justice-in-bankruptcy" when, as public sector employees, bankruptcy is unconceivable, and their pensions and benefits are securefor life. With no champion in sight, it is all to no avail.
The Nortel Retirees and former employees Protection Canada (NRPC) have held three rallies at Queen's Park and Parliament Hill; presented two petitions (18,000 signatures); written thousands of letters; produced full-page ads, and held extensive meetings with provincial and federal cabinet ministers and their bureaucrats. Again it was all to no avail.
Without political power or leverage, this private sector group exists on $20 member donations and all-volunteer commitment. What chance do they have when facing the power of corporate lobbyists, vulture foreign bondholders and the inertia of political hypocrisy?
With only faint hope, all they have left is the court of public opinion. All they have is a tired and desperate voice.
Aristotle described magnanimity as "the crowning virtue." I implore Premier Dalton McGuinty and Prime Minister Stephen Harper to lead elected members of the Ontario legislature and the Canadian Parliament in non-partisan magnanimous gestures of political will, compassion and justice.
Without intervention, the obituary is predetermined. No longer newsworthy, the epitaph will read: "Some cared, but not enough."
John F. Tyson, Ottawa
© Copyright (c) The Ottawa Citizen
Some cared, but not enough to help Nortel pensioners
The Ottawa Citizen September 27, 2010
John F. Tyson writes that it will take special intervention to help Nortel pensioners.
Nineteen months have passed since Nortel filed for bankruptcy protection, the largest in Canadian history. Without provincial and federal government intervention before Sept. 30, the 20,000 Nortel pensioners and long-term disabled will see their pension wound up and forced into annuities, cut by more than 36 per cent, and the end of all health and life insurance benefits by year end.
Without government intervention, they will be abandoned as human sacrifices to the unconscionable harm inflicted by current bankruptcy laws on private sector employees. I am one of them.
During that time, it seems as if I have been pushing-on-a-rope, and in spite of everything tried, I have been unable to find the spark that would ignite the fire within provincial and federal politicians.
The unanswered question is always the same -- why not? Perhaps it's because the intended audience cannot comprehend "justice-in-bankruptcy" when, as public sector employees, bankruptcy is unconceivable, and their pensions and benefits are securefor life. With no champion in sight, it is all to no avail.
The Nortel Retirees and former employees Protection Canada (NRPC) have held three rallies at Queen's Park and Parliament Hill; presented two petitions (18,000 signatures); written thousands of letters; produced full-page ads, and held extensive meetings with provincial and federal cabinet ministers and their bureaucrats. Again it was all to no avail.
Without political power or leverage, this private sector group exists on $20 member donations and all-volunteer commitment. What chance do they have when facing the power of corporate lobbyists, vulture foreign bondholders and the inertia of political hypocrisy?
With only faint hope, all they have left is the court of public opinion. All they have is a tired and desperate voice.
Aristotle described magnanimity as "the crowning virtue." I implore Premier Dalton McGuinty and Prime Minister Stephen Harper to lead elected members of the Ontario legislature and the Canadian Parliament in non-partisan magnanimous gestures of political will, compassion and justice.
Without intervention, the obituary is predetermined. No longer newsworthy, the epitaph will read: "Some cared, but not enough."
John F. Tyson, Ottawa
© Copyright (c) The Ottawa Citizen
Nortel US Non Qualified Pension letter to court
Docket 4020 on the Epiq Website contains a letter from Jackson Townsend, III Regarding Pension Benefits. As a retiree whose Non-Qualified pension was stopped when Nortel filed chapter 11, Jackson has expressed to the court a request for the court to regard pension benefit claims as priority or preferred so that they be considered before other creditor's claims.
I think that Jackson's letter was very courageous on his part speaking up for retirees and expressing the sentiments that we all feel. I plan to send a letter along the same lines to the court to express my desire to see pension claims treated as priority and given a higher payout percentage than other creditors who may be insured or who can certainly absorb the loss much easier than we can.
Pension claims, such as our non-qualified losses, should be considered in a different category than simply general unsecured claims. Pensions are deferred salary and are part of a contract between the company and the employee and they have a direct human impact on lives and living conditions. They should be treated with urgent immediate priority and paid out of the Nortel assets before other corporate and banking claims.
The PBGC claim is seen as a priority claim for qualified defined pension trust fund shortfalls. Our non-qualified pensions were part of a defined pension plan, registered with Erisa, but being paid out of company revenue instead of a PBGC insured trust fund. In my opinion the non-qualified pension claims should have the same priority as the PBGC claim, and treated as tax-deferred payouts in the same manner that the PBGC expects to receive their trust fund claim payment.
I think that Jackson's letter was very courageous on his part speaking up for retirees and expressing the sentiments that we all feel. I plan to send a letter along the same lines to the court to express my desire to see pension claims treated as priority and given a higher payout percentage than other creditors who may be insured or who can certainly absorb the loss much easier than we can.
Pension claims, such as our non-qualified losses, should be considered in a different category than simply general unsecured claims. Pensions are deferred salary and are part of a contract between the company and the employee and they have a direct human impact on lives and living conditions. They should be treated with urgent immediate priority and paid out of the Nortel assets before other corporate and banking claims.
The PBGC claim is seen as a priority claim for qualified defined pension trust fund shortfalls. Our non-qualified pensions were part of a defined pension plan, registered with Erisa, but being paid out of company revenue instead of a PBGC insured trust fund. In my opinion the non-qualified pension claims should have the same priority as the PBGC claim, and treated as tax-deferred payouts in the same manner that the PBGC expects to receive their trust fund claim payment.
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