CTV News | Nortel pensioners protest bankruptcy laws in Ottawa

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Nortel pensioners protest bankruptcy laws in Ottawa

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CTV National News: Roger Smith on the protest
Ottawa is being urged to strengthen the country's bankruptcy laws to protect employees when companies go out of business, as pensioners from Nortel Networks took their fight to Parliament Hill.
CTV Ottawa: Norman Fetterley talks to protestors
Several thousand former Nortel employees came to Parliament Hill to ask the federal government to help them save their pensions from the floundering company.
CTV News Channel: Ken Georgetti on the concerns
The president of the Canadian Labour Congress explains why Nortel pensioners are rallying to secure their pension and disability payments.
CTV News Channel: Don Sproule, national chair
The Nortel Retirees' Protection Commitee is planning a demonstration on Parliament Hill. They are hoping for an amendment to the bankruptcy law to give pensioners a higher priority in court.

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CTV.ca News Staff

Date: Wed. Oct. 21 2009 7:27 PM ET

Former Nortel employees gathered on Parliament Hill to ask for government help to ensure they continue receiving pension and disability payments - regardless of what happens to the beleaguered telecommunications firm.

Organizers said ex-Nortel employees were bussed in from Montreal and Belleville to attend the demonstration, which took place at noon on Wednesday. They were accompanied by Canadian Auto Workers union members and leaders from several federal opposition parties.

The protesters are seeking amendments to national bankruptcy laws. Their goal is "to give pensioners and people affected by the Nortel insolvency a higher priority ranking in the bankruptcy courts," Don Sproule, chairman of the national committee for Nortel pension plan members, told CTV News Channel on Wednesday.

Nortel filed for bankruptcy protection in January. Since then it's been selling off assets. And in June, the company's shares were delisted from the Toronto Stock Exchange.

Former employees say their pensions are less than 70 per cent covered because the company is in bankruptcy proceedings.

Pensions are a provincial responsibility in Canada. But bankruptcy laws are federal, and the protesters say their pension and disability payments are not protected under the current legislation.

"Right now, unsecured bond holders are treated the same as Canadian seniors who have pensions from their employers," said Diane Urquhart, a financial adviser who has been working with ex-Nortel workers.

Bloc Quebecois leader Gilles Duceppe, NDP leader Jack Layton and Liberal leader Michael Ignatieff were expected to join the protest.

Speaking earlier on Wednesday, Ignatieff said he wanted to thank the Nortel pensioners "for stepping up and making the question of pension security, particularly the question of pension security in the case of bankruptcy, the national issue that it's become."

Ignatieff pledged to work with the group to change federal bankruptcy laws to "make sure this kind of thing never happens again to another Canadian."

Sproule said Nortel is paying out around an average of $12,000 per year for unionized former employees. Former white-collar employees receive approximately $22,000 a year.

"So you take a 30 per cent haircut off that, and it's going to leave people in real hardship, in possible poverty and having to sell their house," he said.

Nearly 20,000 workers have been affected by Nortel's financial troubles, according to Sproule. About 17,500 are pensioners. Another 2,000 were let go without severance, and 450 remain on long-term disability from the company.

"The feds like to talk about how sound our financial system is and how we weathered the financial crisis today because of sound legislation," Sproule said.

"I don't think anyone was watching the store in terms of what was happening to pension plans. This dirty little secret's been going on for a long time. It's only the high-profile cases like Nortel that are causing the issue to percolate to the top again."

Comments are now closed for this story

Johnny (Montreal)
said
0 0

I have no idea how Spouole makes a link of this problem to our financial system. This is not a dirty little secret; it's just how things work when you are part of a company pension.No one expected this outcome because oversized egos let themselves believe Nortel would never fail. Maybe the government could help them by giving them priority over other creditors, but no bail out.I feel for these people, however, this is the reason why I personally take responsibility for my own retirement through RRSP and put the money everywhere rather than all in one pot.People need to start taking responsibility for themself. You are not free if you expect the government to do everything for you. When you join a company pension and that company goes bankrupt, you lose everything.The same goes for a bank. If a bank goes bankrupt, you lose everything. Thankfully a bank is more stable than nortel and has some deposit insurance.


bcdarr
said
0 0

Not to sound heartless, but as a person who can't afford a house (let alone have one to sell), doesn't have a pension, and works his butt off to make ends meet, I'm having trouble working up a care regarding people getting only 70 per cent of a pension I can only dream about. Don't they also get Old Age Pension and CPP? Thanks to my job I know a lot of pensioners who ONLY have CPP and OAP and no one's up in arms over that.I realize if you pay into a pension you deserve to get what you were promised. I've no problem with their trying to get their due and wish them luck. I'm just saying people like me aren't going to get too upset about someone losing more than we have to begin with... why would we?


Steve G
said
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Best of luck Nortel employees. Pensions are assets of the employees-PERIOD. This would be no different than allowing creditors to have the right to raid your personal RRSP's in the event of bankruptcy.


Brian in NL
said
0 0

I don't see the three amigos - iggy, jiggy and giggy- bailing out my RRSP from market losses - why should my tax dollars bailout others. It was bad enough to fund excess auto pensions and federal gov't pensions. When does the madness stop? Certainly not with the socialist trio.


MartyP
said
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Re: other commentsThe issue here is not to fight between us average working people as to who's got it worse and who's got the least. The corporations like to have us fight between ourselves for scraps.It's also not about a Government bailout.It is about bringing our bankruptcy laws at par with US and UK when it comes to priority of employees as creditors versus other corporations. It's about deciding as a society whether common people who have worked for 30 years, or disabled people with no other income should their income pillaged in favor of Vulture funds who bough the debt on pennies per dollar and stand to profit hugely from the returns on asset sale. It's about setting the precedent for all other similar situations, be it the pulp and paper business, the steel business etc... so that the average working Canadians who have played by the rules and contributed all along are not unduly punished. It does not take anything away from other Canadians so stop your ridiculous 'envious' comments.It's about having the Conservatives show some leadership as opposed to passing the buck to provinces on Federal Bankruptcy law.


Debbie
said
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What some people need to realize is when you have a company defined pension plan the government has set rules that basically prevent you from being able to contribute much of anything to an RRSP. So they handcuff you on the assumption that you have a pension waiting for you. If that disappears and the government prevented you from contributing to an RRSP that is an issue. In addition for those who think the pension the company offered is really nice - maybe but that is offered in lieu of additional compensation up front - it was part of the total compensation package. So yes these people are losing money and they deserve to be treated and get their funds before banks, and other business creditors


Doug
said
0 0

When enrolled in a pension plan, the allowed RRSP headroom is much reduced, so these pensioners weren't permitted to have as big an RRSP as someone with no pension. Another point is that in the UK and even the US, Nortel (and other) pensioners are much better protected in bankruptcy. Why not in Canada? Why don't we have "deposit insurance" for pensions?


Smitty
said
0 0

The disabled already lost 70%, and now they will lose 90% of that. Their retirement pensions, aren't worth a lot as they haven't been able to contribute. My disability cheque from Nortel which represents 70% of my pre disability salary is $927 per month, and I get drug and dental etc coverage. I also recieve Cpp.I will continue to recieve CPP which is almost $825 per month. and if I am lucky and get the estimated 10% of my disability from Nortel I will be trying to live $952 with no health care. Did I mention I am disabled and require medication to survive. Just because I worked for Nortel, people assume I must be rich, The directors etc are rich, the managers and engineers do okay, but their are and were a lot of us who weren't making large salaries, never got those big bonuses.I paid Nortel for disability Insurance, I don't deserve this. Shame on those of you who choose to hate me and figure I don't deserve anything. Perhaps I could go to work at your job everyday and you could try to survive on my income and suffer my disability


Todd
said
0 0

Both my parents were employed at Nortel, as well as my grandfather. My family worked their butts off for that company with the thought that when the day came for them to retire and get a pension that they could live comfortable lives. Back when they joined the company; the world worked that you invested your security in the company you worked for. These people that are being hit by this are people who played what they were told would be the safe route and it would pay out in the end. Corporate greed and mismanagement ended Nortel....not the economy. And now because of it they are the ones who suffer. Look at the pay outs that some top execs from Nortel got even as they drove the company into the ground. Now the former employees are paying for it. If you think it does not make an impact at knocking off 30%...ask my grandfather who will have to move out of the retirement home he currently resides in because he can no longer afford it. OR ask my father who after working there for over 25 yrs was laid off, then now 1 yr after his wife passed away ...may have no choice but to sell their home of 40yrs because that 30% was taken from him by a company that ruined his life. For those that comment on the fact that these people are still getting 70% and should not complain. Next time you sit down to do your expenses....cut off 30% and look at what that would do to you. Then remember these people are retired...there is no extra hours, jobs, bonuses. That money is all they have.


Christina
said
0 0

I was at the rally today and did not work at Nortel but my mom had 35 years of service at this company and is not sure how she will survive if the pension gets cut by 70%. She worked hard all her life to feel secure for her retirement and now she is paying the price for a company who is going bankrupt. I understand that some who do not have pensions will not get upset about this but what everyone needs to think of is your children, or your grand children who one day may be in this situation. People who are on long term disability may not see a penny of their pension, is that something to get upset about? yes.


Educated in Pensions
said
0 0

@ StevePensions are NOT the employees always. You must read the fine print on your agreements. If the unions and employees can not READ their agreements, then who is at fault? While I feel sorry for the people working at Nortel or any company with a Defined Benefit Plan, the government does have minimum pensions available such as CPP, OAS and GIS. It isn't my responsiblity as a tax payer to FUND any more than we already are.


FACLC
said
0 0

Sorry ex-Nortel employees, but your pensions ARE unsecured credit. Its completely silly to assume they would be treated as anything else come bankruptcy time.


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