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Nortel pensioners to learn more about cuts to underfunded pensions

Posted by on Jul 19, 2011 in Retirement | 0 comments

By LuAnn LaSalle, The Canadian Press  | July 19, 2011

MONTREAL – Former Nortel employees can expect to have their underfunded pensions topped up with their share of the proceeds from the $7.2 billion sale of all its assets from the bankrupt telecom company, but it might not be enough to fully reverse the cuts.

“It’s certainly unrealistic that it’s going to fill up the hole completely,” said lawyer Susan Philpott of Toronto-based Koskie Minsky, representing former Nortel employees.

“We know there is going to be some recovery for the pension plan. We don’t know how much of that underfunding or that deficit will be covered, but it will be some portion of it,” she said Tuesday.

Nortel pensioners will learn more about cuts to their pensions that will begin in late August when they get an update from their pension administrator this Friday.

“They’re all being severely impacted,” said Anne Clark-Stewart of the Nortel Retirees and Former Employees Protection Canada, who has calculated that she will lose 27 per cent of her pension.

“I already have pensioners who are friends and are moving in with each other,” she said. “I know there are other cases where widows have had to move in with their children. A lot of people are selling their homes, just like I am.”

The last of Nortel’s assets — more than 6,000 patents that include technology that’s expected to be the backbone of wireless networks for the next decade — was sold on July 1 for $4.5 billion.

Philpott said the recent patent sale has “really kind of motivated everyone, I think, to try and get this done because there’s a lot of real money at stake.”

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