This is an archive of news stories and research from the National Union of Public and General Employees. Please see our new site - https://nupge.ca - for the most current information.
The limited protection is the same as what Quebec government offered all pension plans in the province in January 2009.
Quebec (27 October 2009) – The Quebec government announced Monday that it will try to protect the remaining pension assets of 3,750 Nortel employees in the province if their pensions are terminated while the company is under bankruptcy protection.
Under the proposal, the agency that oversees pension plan’s in Quebec, the Régie des rentes du Quebec, would take charge of the Nortel pension assets and try to grow the retirement savings on behalf of the Quebec beneficiaries.Such an arrangement would last to a maximum of five years.
"What we're offering to Nortel's Quebec retirees is time, breathing room and hope for a turnaround, if ever their pension plans are terminated with a deficit that causes financial losses for those who have spent their entire lives building the company," national assembly member Francois Ouimet said in a statement.
Although the government's announcement was reported as a new measure in repsonse to the situation faced by former Nortel employees, it was no different than what the government offered all pension plans in January of this year when it introduced legislation that merely guarantees the pension payments at their underfunded level. If for example a pension plan is funded at a 70 percent solvency level when the Quebec government takes over the plan, then a person who was supposed to receive $1,000 a month will only receive a $700 monthly benefit for five years from the government.
The legislation which has not yet been passed, allows retirees whose pension benefits have been reduced due to their employer's bankruptcy, to request that their pension be administered by the Régie des rentes du Quebec up to a maximum of five years.
Last week Nortel pensioners and their supporters rallied on Parliament Hill with the message that workers should come before other creditors when a company goes bankrupt. They demanded the federal government amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act, or bankruptcy protection law, to make workers priority creditors instead of falling to the bottom of the pile as they do now.
Nortel pensioners estimate they are owed more than $1 billion in pension benefits. It's estimated there are close to 19,000 Nortel pensioners in Canada
NUPGE
The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE
More information:
Former Nortel workers call on Parliament to protect pension and benefit plans
Quebec government promises to protect pension plans