Morneau Shepell announces Canadian Pension Cuts

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.