John Rafferty (NDP) MP for Thunder Bay - Rainy River has initiated a petition asking the Government to enact legislation to ensure Pension Security.
This petition is being sent to pensioners and former employees of many other Canadian companies caught in the middle of bankruptcy proceedings.
This petition is in support of Bill C-501.
All Canadians should sign this petition and send it back to Mr. Rafferty's office. No postage is required in Canada. This new bill is intended to help all Canadians who may suffer a loss of pension due to company bankruptcy.
Mr. Rafferty will arrange for supportive MPs of all parties to present these petitions in Parliament as often as possible.
Mr Rafferty's web site is http://johnrafferty.ndp.ca/
Monday, January 31, 2011
Saturday, January 29, 2011
Canadian Supreme Court rejects UK Pension claim
The following story was on http://news.sympatico.ca/ - Jan. 27, 2011.
Supreme Court of Canada rejects U.K. Nortel pensioners claims in Canada
27/01/2011 6:08:00 PM
The Canadian Press
TORONTO - Canada's top court has dismissed an appeal by the U.K. Pensions Regulator that argued it should have the right to collect funds from bankrupt Nortel Networks Corp. for pensioners in Britain.
The Supreme Court of Canada said Thursday said it would not hear an appeal from the U.K. body after an Ontario court ruled against it last March.
The leave to appeal was dismissed by the Supreme Court with costs to all respondents except a group calling themselves the Former Employees and Disabled Employees of Nortel.
The U.K. pension body had attempted to force the Canadian company to pay U.K. pensioners about 2.1 billion pounds, or about $4 billion as it is permitted under that country's 2004 Pensions Act.
Nortel representatives claimed the attempt breached the terms of its creditor agreement filed in Canada, while an Ontario judge ruled that the British regulator's actions were null and void under Canadian law.
Although the U.K. statute extends beyond the British borders, Nortel's insolvency agreement was under Canadian jurisdiction and the claim did not apply, the judge ruled.
Toronto-based Nortel, once Canada's biggest technology company and one of the world's biggest telecom equipment suppliers, has been selling off most of its business under court protection since January 2009.
Nortel sought creditor protection in the United States and Canada on Jan. 14, 2009.
Supreme Court of Canada rejects U.K. Nortel pensioners claims in Canada
27/01/2011 6:08:00 PM
The Canadian Press
TORONTO - Canada's top court has dismissed an appeal by the U.K. Pensions Regulator that argued it should have the right to collect funds from bankrupt Nortel Networks Corp. for pensioners in Britain.
The Supreme Court of Canada said Thursday said it would not hear an appeal from the U.K. body after an Ontario court ruled against it last March.
The leave to appeal was dismissed by the Supreme Court with costs to all respondents except a group calling themselves the Former Employees and Disabled Employees of Nortel.
The U.K. pension body had attempted to force the Canadian company to pay U.K. pensioners about 2.1 billion pounds, or about $4 billion as it is permitted under that country's 2004 Pensions Act.
Nortel representatives claimed the attempt breached the terms of its creditor agreement filed in Canada, while an Ontario judge ruled that the British regulator's actions were null and void under Canadian law.
Although the U.K. statute extends beyond the British borders, Nortel's insolvency agreement was under Canadian jurisdiction and the claim did not apply, the judge ruled.
Toronto-based Nortel, once Canada's biggest technology company and one of the world's biggest telecom equipment suppliers, has been selling off most of its business under court protection since January 2009.
Nortel sought creditor protection in the United States and Canada on Jan. 14, 2009.
Wednesday, January 26, 2011
NRPC townhall in Montreal on CTV
The NRPC held a townhall meeting in Lasalle on January 25th. It was reported on CTV Montreal news and a short story placed on the web.
There are a number of positive comments following the article which you can see at the URL shown at the bottom of this post.
Former Nortel employees fighting to save pensions
Nortel pensioners attend a meeting in LaSalle (Jan. 25, 2011)
Updated: Tue Jan. 25 2011 2:56:16 PM
ctvmontreal.ca
LASALLE — Some of Nortel's former employees met in LaSalle Tuesday, and they were not impressed with what they heard: many are likely to see their pensions be cut in half in the months to come.
Nortel filed for bankruptcy in January 2009, and pensioners and other ex-employees soon learned that they come toward the end of the long list of creditors.
Employees like Ken Lyons say they should be at the front.
"It is a most important issue and it's one thing, we've got all the opposition parties in agreement with us," said Lyons.
The company had already shortchanged its pension plan by about $2.5 billion because it was self-insured, and according to Canadian law, pensioners are considered unsecured creditors.
Funds from the pension plan were transferred to bonds when Nortel declared bankruptcy, and the bond market has not performed as well as the stock market.
Ever since the former employees have banded together and lobbied the federal government to change the law regarding pension plans and those for disabled employees.
However that now seems very unlikely, since last November the Conservative majority in the Senate's banking committee recommended against passing bill S-216, which would have permitted employees who were on long-term disability plans when Nortel went under to extend their benefits.
"We'll remember at election time," vowed Lyons.
3,500 former Nortel employees live in Quebec.
http://montreal.ctv.ca/servlet/an/local/CTVNews/20110125/mtl_nortel_110125/20110125/?hub=MontrealHome
There are a number of positive comments following the article which you can see at the URL shown at the bottom of this post.
Former Nortel employees fighting to save pensions
Nortel pensioners attend a meeting in LaSalle (Jan. 25, 2011)
Updated: Tue Jan. 25 2011 2:56:16 PM
ctvmontreal.ca
LASALLE — Some of Nortel's former employees met in LaSalle Tuesday, and they were not impressed with what they heard: many are likely to see their pensions be cut in half in the months to come.
Nortel filed for bankruptcy in January 2009, and pensioners and other ex-employees soon learned that they come toward the end of the long list of creditors.
Employees like Ken Lyons say they should be at the front.
"It is a most important issue and it's one thing, we've got all the opposition parties in agreement with us," said Lyons.
The company had already shortchanged its pension plan by about $2.5 billion because it was self-insured, and according to Canadian law, pensioners are considered unsecured creditors.
Funds from the pension plan were transferred to bonds when Nortel declared bankruptcy, and the bond market has not performed as well as the stock market.
Ever since the former employees have banded together and lobbied the federal government to change the law regarding pension plans and those for disabled employees.
However that now seems very unlikely, since last November the Conservative majority in the Senate's banking committee recommended against passing bill S-216, which would have permitted employees who were on long-term disability plans when Nortel went under to extend their benefits.
"We'll remember at election time," vowed Lyons.
3,500 former Nortel employees live in Quebec.
http://montreal.ctv.ca/servlet/an/local/CTVNews/20110125/mtl_nortel_110125/20110125/?hub=MontrealHome
Monday, January 24, 2011
Nortel Cost of Sales Accounting change
The following note was published on the Nortel web site. As noted the change will result in a non-cash charge of $2 billion. I hope that means the change will not impact the estate cash available for settling outstanding claims.
Nortel cost of sales
NORTEL ANNOUNCES CHANGE IN ACCOUNTING FOR U.S. SUBSIDIARIES
January 13, 2011
Nortel* Networks Corporation (OTCBB:NRTLQ) and Nortel Networks Limited (together, Nortel) announced they have now determined that Nortel’s U.S. subsidiaries and the subsidiaries they control will be deconsolidated and accounted for under the cost method of accounting, effective as of October 1 2010.
This change is largely based on Nortel’s work toward standalone debtor estates due to the diminishing interdependency between the estates primarily resulting from the sale of substantially all of Nortel’s global businesses. The change in accounting is currently expected to result in a fourth quarter 2010 non-cash charge of over US$2 billion, subject to finalization of Nortel’s year end close process. The charge is primarily related to the recognition of intercompany liabilities between the Canadian estate and U.S. estate that previously were eliminated upon consolidation of the financial results.
The estates continue to work together toward fulfilling Nortel’s obligations under the transition services agreements with purchasers of its sold businesses, as well as in other areas such as efforts to optimize the value of Nortel’s intellectual property portfolio.
As previously reported, Nortel will continue to evaluate the method of accounting for all its subsidiaries.
For more information, visit Nortel on the Web at www.nortel.com . For the latest Nortel news, visit www.nortel.com/news .
Nortel cost of sales
NORTEL ANNOUNCES CHANGE IN ACCOUNTING FOR U.S. SUBSIDIARIES
January 13, 2011
Nortel* Networks Corporation (OTCBB:NRTLQ) and Nortel Networks Limited (together, Nortel) announced they have now determined that Nortel’s U.S. subsidiaries and the subsidiaries they control will be deconsolidated and accounted for under the cost method of accounting, effective as of October 1 2010.
This change is largely based on Nortel’s work toward standalone debtor estates due to the diminishing interdependency between the estates primarily resulting from the sale of substantially all of Nortel’s global businesses. The change in accounting is currently expected to result in a fourth quarter 2010 non-cash charge of over US$2 billion, subject to finalization of Nortel’s year end close process. The charge is primarily related to the recognition of intercompany liabilities between the Canadian estate and U.S. estate that previously were eliminated upon consolidation of the financial results.
The estates continue to work together toward fulfilling Nortel’s obligations under the transition services agreements with purchasers of its sold businesses, as well as in other areas such as efforts to optimize the value of Nortel’s intellectual property portfolio.
As previously reported, Nortel will continue to evaluate the method of accounting for all its subsidiaries.
For more information, visit Nortel on the Web at www.nortel.com . For the latest Nortel news, visit www.nortel.com/news .
Sunday, January 23, 2011
Nortel Canada Disable get a tax break on HWT payout
The following story was presented in the Toronto Sun last week. According to the reporter, the Nortel disabled employees in Canada will get a small break here in that they won't have to pay tax on any payout from the HWT trust.
News Canada
Nortel disabled benefits to be tax free
By SCOTT TAYLOR, QMI Agency
Last Updated: January 13, 2011 8:48pm OTTAWA
- The tax man is giving disabled Nortel employees a break.
Canada Revenue Agency won't be collecting taxes on the payments the workers get from their underfunded health and welfare trust.
On Dec. 31 the roughly 400 disabled employees lost their disability, health, life, dental and pension benefits. They're now left as common creditors, meaning they'll get only an average of about 34% of what they had been living on.
Many are afraid that they won't be able to afford their everyday bills, much less expensive medications. Most are unable to work.
"This is the first really good news we've heard," the workers' court-appointed representative, Sue Kennedy, said Thursday. "Any little help is better than no help at all."
Kennedy also said that she recently met with Government House Leader John Baird, who said the government is looking into ways to further assist the workers, though as yet nothing concrete has been offered.
The employees were thrust into this position because Nortel drastically underfunded its trust fund.
A group of about 30 of them have been fighting to move closer to the head of the line when the company's assets are doled out.
The Ontario Court of Appeal denied a leave to appeal motion brought by a group Jan.7. They were given 60 days to decide whether to take their case to the Supreme Court of Canada.
Meanwhile, Nortel said it will incur a $2-billion charge for a new accounting method related to the sale of its operations.
scott.taylor@sunmedia.ca
News Canada
Nortel disabled benefits to be tax free
By SCOTT TAYLOR, QMI Agency
Last Updated: January 13, 2011 8:48pm OTTAWA
- The tax man is giving disabled Nortel employees a break.
Canada Revenue Agency won't be collecting taxes on the payments the workers get from their underfunded health and welfare trust.
On Dec. 31 the roughly 400 disabled employees lost their disability, health, life, dental and pension benefits. They're now left as common creditors, meaning they'll get only an average of about 34% of what they had been living on.
Many are afraid that they won't be able to afford their everyday bills, much less expensive medications. Most are unable to work.
"This is the first really good news we've heard," the workers' court-appointed representative, Sue Kennedy, said Thursday. "Any little help is better than no help at all."
Kennedy also said that she recently met with Government House Leader John Baird, who said the government is looking into ways to further assist the workers, though as yet nothing concrete has been offered.
The employees were thrust into this position because Nortel drastically underfunded its trust fund.
A group of about 30 of them have been fighting to move closer to the head of the line when the company's assets are doled out.
The Ontario Court of Appeal denied a leave to appeal motion brought by a group Jan.7. They were given 60 days to decide whether to take their case to the Supreme Court of Canada.
Meanwhile, Nortel said it will incur a $2-billion charge for a new accounting method related to the sale of its operations.
scott.taylor@sunmedia.ca
Thursday, January 20, 2011
NRPC Townhall information presented.
The NRPC held a townhall meeting on January 14th for NRPC members in Ottawa. There are 4 other town halls scheduled for later. You can find out more information by going to the NRPC site. Members of the NRPC can access the information presented in the members' section. (See link in right hand column). The slides used in the meeting were also posted on the Nortel Yahoo group by a group member. at:
http://f1.grp.yahoofs.com/v1/AFw4TTraK296tWxhqr6KJwHSzfVJhhyCL1LvxxRxfNmh27oLvDa-hRq5d76-TymJVqApEoqano51j_GzSVFrs_iYgMFS/%20NRPC%20/11.01.14%20yow%20%20townhall%20presentation%20%20v1.pdf
The NRPC has presented information on topics that are important to all Nortel ex-employees including political action,pension plan status, FSM model,the HWT decision, Morneau Sobeco, estimated timeline etc.
It looks like the reduction in pension will occur sometime in the second quarter 2011 and will be timed to coincide with the start of Ontario payouts from the PBGF.
According to a voicemail message I received today Koskie Minsky will not participate in this webinar but will hold one later in the year, probably during the second quarter.
http://f1.grp.yahoofs.com/v1/AFw4TTraK296tWxhqr6KJwHSzfVJhhyCL1LvxxRxfNmh27oLvDa-hRq5d76-TymJVqApEoqano51j_GzSVFrs_iYgMFS/%20NRPC%20/11.01.14%20yow%20%20townhall%20presentation%20%20v1.pdf
The NRPC has presented information on topics that are important to all Nortel ex-employees including political action,pension plan status, FSM model,the HWT decision, Morneau Sobeco, estimated timeline etc.
It looks like the reduction in pension will occur sometime in the second quarter 2011 and will be timed to coincide with the start of Ontario payouts from the PBGF.
According to a voicemail message I received today Koskie Minsky will not participate in this webinar but will hold one later in the year, probably during the second quarter.
NRPC Webinar January 28th
The following information was posted on the Koskie Minsky web site:
Developments
January 14, 2011 NRPC WEBCAST FOR PENSIONERS, SURVIVORS AND FORMER EMPLOYEES OF NORTEL – JANUARY 28th, 2011
The NRPC is hosting a webcast on January 28th, 2011 from 1:00 – 3:00 Eastern to provide an update for those unable to attend one of the five NRPC town hall meetings that are being held during January. The webcast will cover progress on political actions, replacement insurance and topics for terminated employees. Legal actions will not be covered during this NRPC webcast and Koskie Minsky will not be represented on the call. Further Koskie Minsky webcasts will be scheduled in the future so please visit our website regularly for announcements about upcoming webcasts.
Participants who wish to register for the NRPC’s January 28 webcast can do so through the following link:
http://www.bellwebcasting.ca/audience/index.asp?eventid=28512209
Anyone without Internet access can call dial-in (listen only) by first registering through Koskie Minsky. Please leave a voicemail with your name and telephone number on the Koskie Minsky hotline at:
1-866-777-6344 between January 17th – 26th.
A representative will contact you to provide the dial-in number for the webcast
Developments
January 14, 2011 NRPC WEBCAST FOR PENSIONERS, SURVIVORS AND FORMER EMPLOYEES OF NORTEL – JANUARY 28th, 2011
The NRPC is hosting a webcast on January 28th, 2011 from 1:00 – 3:00 Eastern to provide an update for those unable to attend one of the five NRPC town hall meetings that are being held during January. The webcast will cover progress on political actions, replacement insurance and topics for terminated employees. Legal actions will not be covered during this NRPC webcast and Koskie Minsky will not be represented on the call. Further Koskie Minsky webcasts will be scheduled in the future so please visit our website regularly for announcements about upcoming webcasts.
Participants who wish to register for the NRPC’s January 28 webcast can do so through the following link:
http://www.bellwebcasting.ca/audience/index.asp?eventid=28512209
Anyone without Internet access can call dial-in (listen only) by first registering through Koskie Minsky. Please leave a voicemail with your name and telephone number on the Koskie Minsky hotline at:
1-866-777-6344 between January 17th – 26th.
A representative will contact you to provide the dial-in number for the webcast
Tuesday, January 18, 2011
Morneau Sobeco response to some questions.
Late last year I wrote to Morneau Sobeco for some clarification on a few items regarding the wind up of the Nortel Canada pension plan.
The following information was provided to me by one of their representatives working on the Nortel plan.
1) The reductions in pensions will occur as soon as we have determined the appropriate funded level of the plan. You will receive notification in writing before this reduction takes place. We will not wait until the wind up report is approved. Reducing pensions early in the wind up process does help minimize the impact of any overpayment to pensioners at the end of wind up process.
2) Claims have already been made against the estate of Nortel. This occurred prior to Morneau Sobeco's appointment and we continue to be involved in the negotiations. Any settlement would be included in the assets used to determine the wind up funded ratio and ultimately affect the final payments. The timing of the settlement will determine if it can be included in the wind up payments or be dealt with after the wind up payments have been completed.
3) Indexing is not considered in the calculations for the PBGF coverage. Normally Indexing ends immediately when an Ontario plan winds up and annuities are purchased without indexing in respect of members in receipt of a monthly pension. However, Nortel is very different from most pension plans and no decisions have been made yet regarding what options members will receive after the wind up report has been approved.
If you would like any further information, you could contact Morneau Sobeco at (877)392-2074.
The following information was provided to me by one of their representatives working on the Nortel plan.
1) The reductions in pensions will occur as soon as we have determined the appropriate funded level of the plan. You will receive notification in writing before this reduction takes place. We will not wait until the wind up report is approved. Reducing pensions early in the wind up process does help minimize the impact of any overpayment to pensioners at the end of wind up process.
2) Claims have already been made against the estate of Nortel. This occurred prior to Morneau Sobeco's appointment and we continue to be involved in the negotiations. Any settlement would be included in the assets used to determine the wind up funded ratio and ultimately affect the final payments. The timing of the settlement will determine if it can be included in the wind up payments or be dealt with after the wind up payments have been completed.
3) Indexing is not considered in the calculations for the PBGF coverage. Normally Indexing ends immediately when an Ontario plan winds up and annuities are purchased without indexing in respect of members in receipt of a monthly pension. However, Nortel is very different from most pension plans and no decisions have been made yet regarding what options members will receive after the wind up report has been approved.
If you would like any further information, you could contact Morneau Sobeco at (877)392-2074.
Sunday, January 16, 2011
Objection to NNI taking over deferred compensation trust
On December 22, 2010 Nortel filed a motion before the court as outlined in docket 4638 to seek relief regarding the "rabbi" trust that holds the funds placed in there by Nortel employees who thought they were deferring salary to be paid to them at a later date out of the trust.
Unfortunately the trust was established in such a way that Nortel could take back the funds without any fear of legal action by the employees who had, in good faith, placed part of their compensation into the trust.
A number of employees have been receiving monthly or quarterly payouts from that trust believing that it was secure and was their own money. After all they had earned it and had simply placed it into the trust to be deferred until a later date. The money is not a severance, nor a pension, nor a promise. it is actual earnings that they owned, not Nortel.
However the sneakiness of the "Rabbi" trust system allows Nortel to plunder it without repercussion and take it away from the people it belongs to. All legal.
One person so far has objected formally to this plunder. See docket 4710 published on January 13th 2011.
I suggest that others who are impacted by this also place objections before the court. It may cause some re-thinking.
Unfortunately the trust was established in such a way that Nortel could take back the funds without any fear of legal action by the employees who had, in good faith, placed part of their compensation into the trust.
A number of employees have been receiving monthly or quarterly payouts from that trust believing that it was secure and was their own money. After all they had earned it and had simply placed it into the trust to be deferred until a later date. The money is not a severance, nor a pension, nor a promise. it is actual earnings that they owned, not Nortel.
However the sneakiness of the "Rabbi" trust system allows Nortel to plunder it without repercussion and take it away from the people it belongs to. All legal.
One person so far has objected formally to this plunder. See docket 4710 published on January 13th 2011.
I suggest that others who are impacted by this also place objections before the court. It may cause some re-thinking.
Thursday, January 13, 2011
Nortel Canada disabled appeal denied in Ontario court
The following paragraph was included in a story in the Ottawa Citizen yesterday.
The Ontario Court of Appeal has denied dissenting Nortel disabled employees the right to appeal the division of an $80 million health and welfare trust. The group is considering an appeal to the Supreme Court of Canada. There is only enough money in the underfunded trust to support about 35 per cent of long-term disability survivor benefits for widows and life insurance coverage for pensioners. Benefits were cut off at the start of this month and it will take many more months to determine how much more the groups will receive from other Nortel assets.
Read more:
http://www.ottawacitizen.com/business/Alcatel+duck+payment+probes/4095987/story.\
html#ixzz1ApvNIWN3
The Ontario Court of Appeal has denied dissenting Nortel disabled employees the right to appeal the division of an $80 million health and welfare trust. The group is considering an appeal to the Supreme Court of Canada. There is only enough money in the underfunded trust to support about 35 per cent of long-term disability survivor benefits for widows and life insurance coverage for pensioners. Benefits were cut off at the start of this month and it will take many more months to determine how much more the groups will receive from other Nortel assets.
Read more:
http://www.ottawacitizen.com/business/Alcatel+duck+payment+probes/4095987/story.\
html#ixzz1ApvNIWN3
Monday, January 10, 2011
Nortel Dallas Campus up for sale
The following story was published in the Dallas Morning News today:
05:37 PM CST on Friday, January 7, 2011
By STEVE BROWN / The Dallas Morning News
stevebrown@dallasnews.com
One of the biggest suburban office campuses in the Dallas area is up for grabs. Real estate brokers at CB Richard Ellis have been hired to market the more than 800,000-square-foot former Nortel headquarters on North Central Expressway in Richardson.
The two-building Telecom Corridor complex includes a 16-story tower and a three story, almost 400,000-square-foot research and development center. Most of the high profile property is now vacant. Owner Nortel Networks has been in bankruptcy for the last year.
“It’s an orderly bankruptcy liquidation, and everything is being approved through the court,” said Gary Carr, executive vice president in CB Richard Ellis’ investment property division. “We are going to try and get it moved by April.”
International defense and high-tech conglomerate Raytheon Corp. recently looked at buying the property. But the deal never closed. “Raytheon was very close to consolidating and taking the building at one point,” Carr said. “It’s the largest block of office space like this in the Metroplex.
“It represents one of the best corporate relocation potentials in the area,” he said.
The buildings were constructed in 1991 and at one time housed thousands of Nortel workers. They are within walking distance of a DART light rail station. Ericsson and Avaya Inc. currently lease about 30 percent of the buildings. Carr, who’s working on the sale with CB Richard Ellis’ Russell Ingrum, Jack Fraker and Josh McArtor, said the plan is to sell both buildings to the same buyer. “It’s a landmark that stands out architecturally,” Carr said.
05:37 PM CST on Friday, January 7, 2011
By STEVE BROWN / The Dallas Morning News
stevebrown@dallasnews.com
One of the biggest suburban office campuses in the Dallas area is up for grabs. Real estate brokers at CB Richard Ellis have been hired to market the more than 800,000-square-foot former Nortel headquarters on North Central Expressway in Richardson.
The two-building Telecom Corridor complex includes a 16-story tower and a three story, almost 400,000-square-foot research and development center. Most of the high profile property is now vacant. Owner Nortel Networks has been in bankruptcy for the last year.
“It’s an orderly bankruptcy liquidation, and everything is being approved through the court,” said Gary Carr, executive vice president in CB Richard Ellis’ investment property division. “We are going to try and get it moved by April.”
International defense and high-tech conglomerate Raytheon Corp. recently looked at buying the property. But the deal never closed. “Raytheon was very close to consolidating and taking the building at one point,” Carr said. “It’s the largest block of office space like this in the Metroplex.
“It represents one of the best corporate relocation potentials in the area,” he said.
The buildings were constructed in 1991 and at one time housed thousands of Nortel workers. They are within walking distance of a DART light rail station. Ericsson and Avaya Inc. currently lease about 30 percent of the buildings. Carr, who’s working on the sale with CB Richard Ellis’ Russell Ingrum, Jack Fraker and Josh McArtor, said the plan is to sell both buildings to the same buyer. “It’s a landmark that stands out architecturally,” Carr said.
Saturday, January 8, 2011
Georgia's New Tax Plan will negatively impact seniors
Currently in Georgia, seniors may earn up to $30,000 from pensions or retirement savings interest without paying state taxes on it. This ruling was put in place to help seniors survive on a fixed income. It was also meant to attract out of state seniors who might otherwise consider moving to tax free states like Florida,Tennessee, or Texas to retire in.
Now a new plan is being proposed that would eliminate that exemption, and also add a new state sales tax to life necessities such as groceries.
The new Georgia tax proposal is simply a ruse to increase taxes on seniors and the poor, and give tax breaks to businesses and the wealthy. It means a huge reduction in disposable income for seniors, and a jump in the cost of living that will not be reflected in any social security increase. Is this what they mean by fair tax?
With the rush of Georgia to become a single party state with a business first attitude, and a focus only on the desires of the rich and their lobbyists, who is going to speak for and protect the old, the weak and the poor, a cultural value that our country used to pride itself on?
With this Georgian attitude, Florida looks better all the time to the large and growing population of Georgia seniors. How is it going to help Georgia when all the money they spend moves south?
Now a new plan is being proposed that would eliminate that exemption, and also add a new state sales tax to life necessities such as groceries.
The new Georgia tax proposal is simply a ruse to increase taxes on seniors and the poor, and give tax breaks to businesses and the wealthy. It means a huge reduction in disposable income for seniors, and a jump in the cost of living that will not be reflected in any social security increase. Is this what they mean by fair tax?
With the rush of Georgia to become a single party state with a business first attitude, and a focus only on the desires of the rich and their lobbyists, who is going to speak for and protect the old, the weak and the poor, a cultural value that our country used to pride itself on?
With this Georgian attitude, Florida looks better all the time to the large and growing population of Georgia seniors. How is it going to help Georgia when all the money they spend moves south?
Thursday, January 6, 2011
Canada's ill treatment of disabled.
The following was sent to me by Diane Urquhart who is fighting to help the Nortel Disabled as they face incredibly inhumane treatment by the Canadian government and the bankruptcy courts.
A most telling statistic is the picayune benefits provided by Canada as compared to more humane countries like the UK and the US.
For example a disabled parent with 2 children receives annually:
In Canada $18,408.
In the USA $48,780.
In the UK $47,509.
What has happened to Canada? Where is your conscience? Your government has apparently turned you into a bunch of right-wing money grubbing capitalists with no compassion. That's not the Canada I knew. Time for Canadians to waken up.......
Article follows:
Nortel employees seek legal clarity around health and welfare trust
Diane Urquhart | January 05, 2011
The dissenting disabled employees of Nortel have filed a leave to appeal to the Court of Appeal of Ontario to gain a last minute reprieve from the life of poverty and medical crisis they feel they will face now that their health and welfare trust (HWT) has been terminated, a move that went into affect on Jan.1, 2011.
A decision on whether the appeal will be heard is expected to come soon.
Many Canadians with disabilities live in poverty due to grossly inadequate Canada Pension Plan (CPP) disability income. A single person with a disability receives a maximum of $13,521 per year. A disabled parent with two children receives only a maximum of only $18,408 per year. Nortel disabled employees have average medical costs of $7,200, with one at $50,000 per year.
These benefits are under par when compared to benefits in the U.S. and U.K. In the U.S, a disabled person with two children gets $48, 780 per year from Social Security and the U.K. Pension Protection Fund provides for $47,509 a year.
This appeal will define whether vested pensioner life insurance benefits are the legal obligation of the employer or of the legally distinct HWT. If the court precedent is for vested pensioner life insurance benefits to be legal obligations of an HWT, 1.1 million Canadians in self-insured disability income plans had better opt out of their employer plans and seek personal disability insurance coverage.
The actuarial liabilities for disability income are always a small proportion of the total actuarial liabilities for pensioners vested life insurance benefits and disability income due to only 0.9% of the workforce is disabled. HWT’s are generally not fully funded. When deficient HWT assets are used to pay both pensioners life insurance and disability income on an HWT termination, the disabled get deeply compromised.
In his Nov. 9, 2010 decision, the Nortel Companies’ Creditors Arrangement Act judge, Justice Geoffrey Morawetz, added the following words to interpret the meaning of future benefits in the 1980 Nortel HWT Trustee Agreement termination clause: “claims that would certainly have been made in the future.” The termination clause says: “The trustee shall also determine on a sound actuarial basis the amount of money necessary to pay and satisfy all future benefits and claims to be made under the plan in respect of benefits and claims up to the date of notice of termination.”
The added words allow a lump-sum payment of $3,500 each to the 10,000 living pensioners from the HWT. The 400 disabled are left with a lump-sum settlement from the HWT that funds just 27% of their disability income until age 65, death or recovery.
The leave to appeal asks that legal interpretation of “future benefits and claims” be made in the context of “incurred claims.” Under accepted insurance and actuarial principles and practices, future benefits relate only to incurred claims for insured events that have already occurred prior to the termination of the contract. Deaths benefits for living pensioners are not incurred claims, because the insured event of death has not occurred prior to the termination of the HWT.
Justice Geoffrey Morawetz’s Nov. 9, 2010 Nortel HWT decision conflicts with Canada Revenue Agency (CRA) rules for HWTs. The income tax act has had a clause since 1979, of no tax deduction for employer contributions paying for life insurance beyond the current year. The Nortel HWT has always had pensioners’ group one-year term life insurance policies that are automatically terminated upon Nortel’s receivership or bankruptcy. CRA ruling documents clearly say that HWT’s have no liability for future life insurance premiums and must not have a permanent surplus.
On the other hand, future disability income is part of the incurred claim from the onset of disability before the HWT’s termination. According to a 1979 CRA interpretation bulletin, a self-insured disability wage loss replacement plan is to operate on insurance principles and like “an insurance plan.” So, the HWT does have a legal obligation to pay the future income of the disabled beneficiaries.
The 1998 Canadian Pacific Railway law case reinforces that HWT assets funding future disability income are not a contingent reserve, but a legal obligation.
It is surprising that income tax act rules for HWTs, which are a CRA defined vehicle, have been ignored by Justice Geoffrey Morawetz and the counsel representing the employer, court monitor, pensioners, and the disabled and continuing employees.
The appeal will clarify whether income tax rules for HWTs and insurance and actuarial principles and practices may be ignored in the interpretation of HWT trustee agreements.
Diane A. Urquhart is an independent financial analyst working as a financial expert in class actions, bankruptcy proceedings and governments hearings on legislative reform and regulatory enforcement of securities, pension plans and health and welfare trusts.
A most telling statistic is the picayune benefits provided by Canada as compared to more humane countries like the UK and the US.
For example a disabled parent with 2 children receives annually:
In Canada $18,408.
In the USA $48,780.
In the UK $47,509.
What has happened to Canada? Where is your conscience? Your government has apparently turned you into a bunch of right-wing money grubbing capitalists with no compassion. That's not the Canada I knew. Time for Canadians to waken up.......
Article follows:
Nortel employees seek legal clarity around health and welfare trust
Diane Urquhart | January 05, 2011
The dissenting disabled employees of Nortel have filed a leave to appeal to the Court of Appeal of Ontario to gain a last minute reprieve from the life of poverty and medical crisis they feel they will face now that their health and welfare trust (HWT) has been terminated, a move that went into affect on Jan.1, 2011.
A decision on whether the appeal will be heard is expected to come soon.
Many Canadians with disabilities live in poverty due to grossly inadequate Canada Pension Plan (CPP) disability income. A single person with a disability receives a maximum of $13,521 per year. A disabled parent with two children receives only a maximum of only $18,408 per year. Nortel disabled employees have average medical costs of $7,200, with one at $50,000 per year.
These benefits are under par when compared to benefits in the U.S. and U.K. In the U.S, a disabled person with two children gets $48, 780 per year from Social Security and the U.K. Pension Protection Fund provides for $47,509 a year.
This appeal will define whether vested pensioner life insurance benefits are the legal obligation of the employer or of the legally distinct HWT. If the court precedent is for vested pensioner life insurance benefits to be legal obligations of an HWT, 1.1 million Canadians in self-insured disability income plans had better opt out of their employer plans and seek personal disability insurance coverage.
The actuarial liabilities for disability income are always a small proportion of the total actuarial liabilities for pensioners vested life insurance benefits and disability income due to only 0.9% of the workforce is disabled. HWT’s are generally not fully funded. When deficient HWT assets are used to pay both pensioners life insurance and disability income on an HWT termination, the disabled get deeply compromised.
In his Nov. 9, 2010 decision, the Nortel Companies’ Creditors Arrangement Act judge, Justice Geoffrey Morawetz, added the following words to interpret the meaning of future benefits in the 1980 Nortel HWT Trustee Agreement termination clause: “claims that would certainly have been made in the future.” The termination clause says: “The trustee shall also determine on a sound actuarial basis the amount of money necessary to pay and satisfy all future benefits and claims to be made under the plan in respect of benefits and claims up to the date of notice of termination.”
The added words allow a lump-sum payment of $3,500 each to the 10,000 living pensioners from the HWT. The 400 disabled are left with a lump-sum settlement from the HWT that funds just 27% of their disability income until age 65, death or recovery.
The leave to appeal asks that legal interpretation of “future benefits and claims” be made in the context of “incurred claims.” Under accepted insurance and actuarial principles and practices, future benefits relate only to incurred claims for insured events that have already occurred prior to the termination of the contract. Deaths benefits for living pensioners are not incurred claims, because the insured event of death has not occurred prior to the termination of the HWT.
Justice Geoffrey Morawetz’s Nov. 9, 2010 Nortel HWT decision conflicts with Canada Revenue Agency (CRA) rules for HWTs. The income tax act has had a clause since 1979, of no tax deduction for employer contributions paying for life insurance beyond the current year. The Nortel HWT has always had pensioners’ group one-year term life insurance policies that are automatically terminated upon Nortel’s receivership or bankruptcy. CRA ruling documents clearly say that HWT’s have no liability for future life insurance premiums and must not have a permanent surplus.
On the other hand, future disability income is part of the incurred claim from the onset of disability before the HWT’s termination. According to a 1979 CRA interpretation bulletin, a self-insured disability wage loss replacement plan is to operate on insurance principles and like “an insurance plan.” So, the HWT does have a legal obligation to pay the future income of the disabled beneficiaries.
The 1998 Canadian Pacific Railway law case reinforces that HWT assets funding future disability income are not a contingent reserve, but a legal obligation.
It is surprising that income tax act rules for HWTs, which are a CRA defined vehicle, have been ignored by Justice Geoffrey Morawetz and the counsel representing the employer, court monitor, pensioners, and the disabled and continuing employees.
The appeal will clarify whether income tax rules for HWTs and insurance and actuarial principles and practices may be ignored in the interpretation of HWT trustee agreements.
Diane A. Urquhart is an independent financial analyst working as a financial expert in class actions, bankruptcy proceedings and governments hearings on legislative reform and regulatory enforcement of securities, pension plans and health and welfare trusts.
Wednesday, January 5, 2011
Mediation
It has been a while since I heard anything about what is happening on the mediation talks between all the parties trying to determine the allocation of Nortel Estate assets between countries. I spoke to a representative of Koskie Minsky about a month ago and she told me that they were participating. I also expect that the monitor Ernst and Young is there as well. I don't know if the Canadian Government is represented though I would think that the CRA has a big interest. The creditor's committee is most likely involved, which means that the PBGC is in there looking after the USA pension trust fund that pays retirees in the US when companies go bankrupt. The UK is in there with their pension protection fund people and they have an outrageous sized claim on the global estate. So where is Canada?
It would be nice if Koskie Minsky gave us a hint of what is happening, or the NRPC for that matter. This mediation will have a huge impact on all claimants whether in the US or Canada but the Canadian pensioners and LTD people will be directly impacted since they are waiting on the resolution to understand if there will be any assistance to them for their pensions and disabled payment benefits. Retirees in the USA and the UK are already covered by their respective governments up to the limits and within the rules of those organizations, but the Canadian pensioners are at the mercy of the courts and the administrator where their pension is concerned.
A decision in favor of Canada may negatively impact other country claimants but it will have no impact on the basic qualified pensions that are being paid to retirees in the US and the UK. It will have an impact on retirees in Canada since their pension trust fund is underwater and has a claim against the estate which if paid out could help enhance the amount of pension they receive. The same situation exists for the Canadian Disabled people who have virtually nothing in the portion of the HWT fund that they were allocated by the court. They have a claim against the estate for the money promised them and a payout there would make a huge difference to them.
I don't understand why we are not being kept better informed on the progress of this and other items such as Morneau Sobeco's progress on determining the funding ratio of the fund.
It would be nice if Koskie Minsky gave us a hint of what is happening, or the NRPC for that matter. This mediation will have a huge impact on all claimants whether in the US or Canada but the Canadian pensioners and LTD people will be directly impacted since they are waiting on the resolution to understand if there will be any assistance to them for their pensions and disabled payment benefits. Retirees in the USA and the UK are already covered by their respective governments up to the limits and within the rules of those organizations, but the Canadian pensioners are at the mercy of the courts and the administrator where their pension is concerned.
A decision in favor of Canada may negatively impact other country claimants but it will have no impact on the basic qualified pensions that are being paid to retirees in the US and the UK. It will have an impact on retirees in Canada since their pension trust fund is underwater and has a claim against the estate which if paid out could help enhance the amount of pension they receive. The same situation exists for the Canadian Disabled people who have virtually nothing in the portion of the HWT fund that they were allocated by the court. They have a claim against the estate for the money promised them and a payout there would make a huge difference to them.
I don't understand why we are not being kept better informed on the progress of this and other items such as Morneau Sobeco's progress on determining the funding ratio of the fund.
Monday, January 3, 2011
Canadian NRPC Town Hall Meetings 2011
In the latest newsletter the Canadian NRPC has announced that there will be a series of town hall meetings in 2011. The following meetings have been set up:
Jan 12 Belleville 10am-noon Greek Hall
70 Harder Dr.,Belleville, ON, K8N 4Z5
Jan 14 Ottawa noon-2pm Nepean Sportsplex
1701 Woodroffe Avenue, Ottawa, K2G 1W2
Jan 18 London 1pm-3pm Marconi Club,
120 Clarke Road, London, ON N5W 5E1
Jan 20 GTA 10am-noon Mississauga Conv. Centre
Derry Rd at Hurontaio
Jan 25 Montreal Centre de recéption Sorrento
1275 Avenue Dollard, Lasalle, QC H8N 2J1
10am-noon English
1:30pm-3:30pm French
For people in smaller locations and outside Canada there will be a webinar on Friday 28th 2011 from 1:00pm to 3:00pm.
Jan 12 Belleville 10am-noon Greek Hall
70 Harder Dr.,Belleville, ON, K8N 4Z5
Jan 14 Ottawa noon-2pm Nepean Sportsplex
1701 Woodroffe Avenue, Ottawa, K2G 1W2
Jan 18 London 1pm-3pm Marconi Club,
120 Clarke Road, London, ON N5W 5E1
Jan 20 GTA 10am-noon Mississauga Conv. Centre
Derry Rd at Hurontaio
Jan 25 Montreal Centre de recéption Sorrento
1275 Avenue Dollard, Lasalle, QC H8N 2J1
10am-noon English
1:30pm-3:30pm French
For people in smaller locations and outside Canada there will be a webinar on Friday 28th 2011 from 1:00pm to 3:00pm.
Saturday, January 1, 2011
Canadian NRPC Annual dues
The NRPC have issued a newsletter sent by email to their paying membership.
One item on the newsletter and also published on the NRPC website is the request for members to pay an annual dues of $20 CDN.
For those of you who wish to join or re-join you can do so by logging on to their website and following the instructions.
Personally I think the $20 fee is reasonable considering the work that they are doing to try to help us. Perhaps the fee could be waived for disabled people, and widows or widowers of retired Nortel people who wish to join.
I know that there are many Nortel retirees and ex-employees who are not members of the NRPC and that's their choice. Perhaps it's because they don't know about it, or because they just don't want to join for various reasons.
I believe firmly that all ex-Nortel people should get what ever information is out there on this situation, whether you are a member of the NRPC or not so I will continue to try to keep people informed as we go through these difficult times.
Please feel free to pass on my blog address to your friends and colleagues. However, I would like to point out that the information I place on this blog is not a substitute for being a member of the NRPC and receiving information directly from them. But since my interest is in both Canada and the USA I will try to provide updates for both areas.
I hope this new year will bring some closure to the situation and that it will be better than our expectations.
One item on the newsletter and also published on the NRPC website is the request for members to pay an annual dues of $20 CDN.
For those of you who wish to join or re-join you can do so by logging on to their website and following the instructions.
Personally I think the $20 fee is reasonable considering the work that they are doing to try to help us. Perhaps the fee could be waived for disabled people, and widows or widowers of retired Nortel people who wish to join.
I know that there are many Nortel retirees and ex-employees who are not members of the NRPC and that's their choice. Perhaps it's because they don't know about it, or because they just don't want to join for various reasons.
I believe firmly that all ex-Nortel people should get what ever information is out there on this situation, whether you are a member of the NRPC or not so I will continue to try to keep people informed as we go through these difficult times.
Please feel free to pass on my blog address to your friends and colleagues. However, I would like to point out that the information I place on this blog is not a substitute for being a member of the NRPC and receiving information directly from them. But since my interest is in both Canada and the USA I will try to provide updates for both areas.
I hope this new year will bring some closure to the situation and that it will be better than our expectations.
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