They say they’re worried that the U.S. Pension Benefit Guaranty Corp. will try to get Canadian assets of the insolvent company to cover a $514-million deficit in the U.S. pension plan.
With the Nortel Networks pension plan in more trouble than previously believed, the U.S. government stepped in Friday to take control of the U.S. pension plan and guarantee the pensions of 23,000 employees and retirees in that country.
Canadian Nortel pensioners fear the U.S. agency, a quasi-governent agency backed by the U.S. government, will act quickly to try to protect U.S. interests. It sits on the official creditors committee in the Nortel bankruptcy action and has lots of experience taking over pension plans after a string of airline, steel and other industrial bankruptcies.
For Nortel U.S. employees and pensioners, the takeover is good news because it guarantees that pensions of as much as $54,000 US annually will be paid from the Pension Benefit Guaranty Corp. fund.But for more than 20,000 Canadian Nortel pensioners, employees and people with rights to future pensions, the future is much bleaker. The U.S. action means their hopes that their pension plan will survive the Nortel bankruptcy are effectively dead. Only Ontario guarantees pensions of up to $12,000 annually and only for work that was performed in the province.
The estimated 40% of Nortel employees who worked in Montreal, Calgary and other provinces have no guarantees.
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Yves,
please refer to the comment under the post with dog in the Chinese Zoo being tortured by the feeding of the lion cubs.
I know you meant well, but it is actually very torturous for the little dog…As a vet nurse, this picture is not cute.
She is tethered to a chain being forced to feed 3 lion cubs almost her size. Dogs half this size are weaned from the bitch at half the sizes of the three cubs.
She is underweight and her rear left breast looks infected.
This must come down.
There are also protests to The Telegraph for publishing this shot out of China.
I think this shot should be removed from this site.
PBGC took over the pension plan of Nortel's US subsidiary. As did the UK's Pension Protection Fund for the pension plan of the UK subsidiary.
I can't imagine that the funds of Nortel's US, Canadian, and UK pension funds were commingled. So I don't see any direct link between the PBGC's actions and the fate of Canadian pensioners.
Sorry folks, go after your own government and leave ours alone.
The pension wars could become even greater if higher inflation takes off. PBGC pensioners don't get COLA, but they are nevertheless expected to pony up ever higher taxes to COLA public pensions. Wait till US Nortel workers lose their pensions to inflation. That's when the real screaming will start.