The administrator of the Nortel Canada Pension plan published their estimates for reduction of the plan payments on their web site yesterday. You can find the details by using the link in the right hand column to access their site.
Basically the reductions for the non-negotiated plan members will be 30% for those who have Ontario pensions and service and 41% for those who have pensions generated by service in other provinces. That means only up to 70% and 59% of the benefit will be paid on an interim basis. I say up to because there will be an addition reduction of up to 7% to account for the fact that pensions have been paid at 100% since October 2010 and they should have been paid at a lower amount. The reduction will be based on age and the amounts paid with a cap of 7%. So people with Ontario service may only get 63% and people with pensions based in other Provinces may get 52%.
The negotiated plan has slightly different figures. The corresponding reduced pension numbers are 75% and 57%.
In Ontario there is some pension protection and the PBGF will be making up the first $1000 per month of pension for people whose pension was from Ontario. This may help raise the percentage above the 70% quoted.
People with split service will see a reduction reflecting the proportion of their service from Ontario and well as other provinces.
The reductions will occur on the August 25th 2011 payment.
Each pensioner will receive an individual letter from Morneau Shepell and there will be a webinar on July 22nd 2011 from 1:00-3:00 PM to explain the reductions
You can register for that webinar on the administrator site. (See right hand column).
You can also call Morneau Shepell at 1-877-392-2073 for the negotiated plan details, and 1-877-392-2074 for the managerial and non-negotiated plan detail.
Wednesday, July 13, 2011
Wednesday, July 6, 2011
Us Trustee
The US Justice department has a group called the US Trustee. The people in that department have the mandate to oversee bankruptcy cases and make sure that the law is properly followed. The US Trustee intervened in the Nortel case when Nortel attempted to cut off retiree medical and other benefits in 2010. The Trustee was able to stop Nortel's petition and as a result Nortel had to withdraw their petition at that time. Nortel has reinitiated their plan to reduce or eliminate the medical and other benefits. However, this time they are going through the proper bankruptcy procedure by requesting that the court approve the formation of a 1114 committee. This process is currently underway and the US Trustee will be keeping a close eye on it to make sure it is per the bankruptcy codes.
It is good to know that some government agency has the retirees benefits in mind, even if it is only to ensure the courts follow the right process.
I am not sure if such an agency exists in Canada, but I would think that it would certainly be a good thing for Canadian retirees if a government agency was able to step in and have a say regarding the dispersion of the Nortel Canada Assets. Since the government there has practically thrown the retirees to the dogs by avoiding to provide pension insurance or protection, perhaps they could take some pro-Canadian steps to ensure that the Nortel Pension Fund receives payments from the assets, instead of handing large sums over to the UK and other European agencies who are trying to by-pass Canadian law to get their hands on a bigger share of the Nortel assets than they should be.
Since Nortel UK declared bankruptcy then the the UK claims should be placed against the Nortel UK assets, not the Candian assets, nor the US assets. If Canada and the US allow the UK claims and EMEA claims to be made against the Canadian and US estates it will circumvent the normal bankruptcy process in our countries and generate a precedent that will have worldwide implications. The US trustee, and if there is an equivalent in Canada, needs to get involved to make sure the proper process is followed regarding those foreign claims which have already been denied by both the US and Canadian courts. Otherwise all claims will become global and everyone will start claiming on company divisions in every countrynof operation resulting in total stalemate.
Along the same lines, both countries need to get involved in the asset allocation process. The UK and EMEA have been arguing forcefully that they should have more assets allocated to them since they have such large claims. This is simply another tactic to get their hands on a bigger piece of the pie. Their argument should be overruled. The dispersion of sold assets should not be based on claims but on other more relevant factors related to company presence, funding, sales, employees, ex employees, R&D etc.... Not claims.
It is good to know that some government agency has the retirees benefits in mind, even if it is only to ensure the courts follow the right process.
I am not sure if such an agency exists in Canada, but I would think that it would certainly be a good thing for Canadian retirees if a government agency was able to step in and have a say regarding the dispersion of the Nortel Canada Assets. Since the government there has practically thrown the retirees to the dogs by avoiding to provide pension insurance or protection, perhaps they could take some pro-Canadian steps to ensure that the Nortel Pension Fund receives payments from the assets, instead of handing large sums over to the UK and other European agencies who are trying to by-pass Canadian law to get their hands on a bigger share of the Nortel assets than they should be.
Since Nortel UK declared bankruptcy then the the UK claims should be placed against the Nortel UK assets, not the Candian assets, nor the US assets. If Canada and the US allow the UK claims and EMEA claims to be made against the Canadian and US estates it will circumvent the normal bankruptcy process in our countries and generate a precedent that will have worldwide implications. The US trustee, and if there is an equivalent in Canada, needs to get involved to make sure the proper process is followed regarding those foreign claims which have already been denied by both the US and Canadian courts. Otherwise all claims will become global and everyone will start claiming on company divisions in every countrynof operation resulting in total stalemate.
Along the same lines, both countries need to get involved in the asset allocation process. The UK and EMEA have been arguing forcefully that they should have more assets allocated to them since they have such large claims. This is simply another tactic to get their hands on a bigger piece of the pie. Their argument should be overruled. The dispersion of sold assets should not be based on claims but on other more relevant factors related to company presence, funding, sales, employees, ex employees, R&D etc.... Not claims.
Friday, July 1, 2011
Nortel patent sale posted on Nortel site
Following my previous post, I checked Nortel's web site and they have posted information of the sale of the patents for $4.5b.
See:
http://www2.nortel.com/go/news_detail.jsp?cat_id=-8055&oid=100272428&locale=en-US&lcid=-1
Tom
See:
http://www2.nortel.com/go/news_detail.jsp?cat_id=-8055&oid=100272428&locale=en-US&lcid=-1
Tom
Nortel patents sale
According to Marketwatch Nortel has sold its patents for $4.5b to a consortium. See
http://www.marketwatch.com/story/nortel-announces-the-winning-bidder-of-its-patent-portfolio-for-a-purchase-price-of-us45-billion-2011-06-30?reflink=MW_news_stmp
If this is true it will be a very nice addition to the total estate that will be available for distribution.
Now they need to get the allocation process sorted out and also deal with the claims including the outrageous claims from Europe.
Then we may see some distribution against our outstanding claims.
Hopefully this will do something to help the deficit in the Canadian pension trust fund.
http://www.marketwatch.com/story/nortel-announces-the-winning-bidder-of-its-patent-portfolio-for-a-purchase-price-of-us45-billion-2011-06-30?reflink=MW_news_stmp
If this is true it will be a very nice addition to the total estate that will be available for distribution.
Now they need to get the allocation process sorted out and also deal with the claims including the outrageous claims from Europe.
Then we may see some distribution against our outstanding claims.
Hopefully this will do something to help the deficit in the Canadian pension trust fund.
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