Nortel Bankruptcy: the Impact on Retirees An interview with Normand Pelletier by Michel Pinard

Transcription

1 Montreal Chapter Newsletter October 2018 Nortel Bankruptcy: the Impact on Retirees An interview with Normand Pelletier by Michel Pinard Michel Pinard Normand Pelletier spent the early part of his career at Bell (11 years) before making the leap to Nortel in 1987 as Senior Director - Sales, for a period of 22 years. He never ever thought that this prestigious company would eventually go bankrupt. Normand, can you put us in context: how did the downfall of NTL begin? It started with the stock market crash of Nortel was affected by the crash internally, its own shares value falling significantly, but also as an investor in shares of other companies. The Directors misread the state of the economy and greatly overestimated their future financial performance; their forecasts were obviously not met, which aggravated the situation. On January 14, 2009, Nortel was placed under the Creditor Protection Act. So, the situation deteriorated very quickly. Internally, the employees knew what was going on? No, there was no internal communication; it was reported in the newspapers that Nortel had come under the Creditor Protection Act. During this period the monthly pensions were paid in full. Then, in July 2011, following an actuarial valuation, the pension plan administrator informed Nortel employees of the status of their plan with respect to its funding. The assets are able to cover only about 59% of defined benefits. Then future pensions are adjusted downward to reflect the overpayment since the transfer of the fund to the new administrator. Finally, the pension fund can only pay about 57% of the specified defined benefits. In addition, we learn that all benefits, including life insurance, are lost. What a shock! Having received this news, what did you do? We started from scratch. We didn t have a pensioners' association like Bell. The employees regrouped. We had to go through the courts to get all the details of the retirees from Nortel. We called on the retirees to form a group. We asked for a membership fee of $20.00, which allowed us to send mail to recruit members and then inform them of the progress of the situation. We created a database organized by postal code and then by electoral district. Representatives for these districts were appointed and they contacted MPs to raise awareness of the situation. You have been able to form a sizeable group of pensioners?...continue on page 2... IN THIS ISSUE: Normand Pelletier retiree from Nortel Nortel Bankruptcy: the Impact on Retirees 1 A word from the Montreal Chapter Chair 2 Message from the President of BPG 3 Pension Committee Update 4 BPG Board of Directors 2019 Nomination 5 Welcome to our New Members 6 1

2 Nortel Bankruptcy: the Impact on Retirees An interview with Normand Pelletier by Michel Pinard...continuing from page 1... Yes and without that, we would not have had the same respectability and the same bargaining power. We recruited pensioners, about 80% of the total. We wanted to have the group of pensioners recognized as a priority creditor in order to maintain our pensions but the federal government didn t accept that. We knew that once the assets were liquidated we would only receive about 57% of our pensions. At the time of the dissolution of the fund, the administrator would transfer the amount of money generating the pension to each employee. It was therefore necessary to act quickly to avoid receiving this amount in a single payment and to minimize the tax impact. We obtained approval from the Quebec government, thanks to Sam Hamad (Minister of Employment at the time) to transfer the funds of retirees from Quebec to the Quebec Pension Plan. This Plan administers the funds of all retirees, which would potentially lead to better returns and, most importantly, continue to provide a monthly pension. And everything else, benefits, life insurance etc. was lost? I calculated the value of all these benefits and created a claim that our lawyers presented to the court for restitution. It took 9 years!!! The final settlement took place in spring 2017; the court awarded us 45,5% of the claim we asked for. Thanks to this settlement, our pension went from 57% to 63,7% of our planned pension. It's a great victory! But it was achieved at the cost of considerable work during all those years. You have really earned every dollar you have raised! In retrospect what are the determining factors of your success? Look, there are two main elements: the first is the pensioners' adhesion to our group of 80%. I am convinced that without this high representation, we would not have had the same clout with politicians and the media. The second is the hard work of the volunteers who pleaded the case. It was necessary to organize everything, to put on the pressure (we had 85 meetings with MPs and ministers) and above all, to hold on, not to get discouraged. Normand, it's a very inspiring story. Congratulations to all who led this fight. I think I can now wish you a good retirement! A Word from the Chair of the Montreal Chapter Hi everyone, I will be very brief because this newsletter already contains a lot of very useful information. On the front page, the interview by Michel Pinard says everything about the purpose of BPG! Thanks to Michel and to Normand Pelletier for this very revealing interview. Thanks to you, our chapter now has a record number of members: Thank you to each and every one of you. Let's continue to grow, because our potential is about members. You will soon receive the notice of renewal of your membership for the year If you re hesitating to renew, please read Michel Pinard's article again. Pass it on to your retired non-member friends. They will surely conclude that it s a great idea to join our BPG! Your BPG is counting on you! Greetings and enjoy the autumn. Lucie This newsletter is published by the Montreal Chapter of the Bell Pensioners Group (BPG). The inclusion of an advertisement in this newsletter does not imply an endorsement by BPG. Please send your comments or suggestions to: montreal@bellpensionersgroup.ca or call

3 Message from the President - Patte Seaton Hoping you all had some time over the summer to relax and recharge. I know I would have liked the summer to continue just a little bit longer In September we get back to business with a clear focus on our mandate of Protecting your pensions. We are very fortunate that there is more support for pension protection than we have ever seen before thanks partially to the unfortunate Sears situation. We are partnering with many organizations and are approaching matters collectively. This means that when we are addressing the governments, either provincial or federal, that we are coming to the table with the loudest voice possible. Just to give you an idea what that looks like: BPG realized a number of years ago, that the more retirees that we represent the louder our voice. We have over 10,000 members, but when you are lobbying governments for change, that voice was just not loud enough. So the Canadian Federation of Pensioners (CFP) was formed in 2005 with BPG as a founding member with an advocacy focus to protect DB pensions. Today it represents over 250k DB pensioners and their families. In addition to BPG, its membership includes associations that represent retirees from Air Canada, Chrysler Canada, Dupont, General Motors, Algoma, Nortel, MacMillan Bloedel Weyerhaeuser, Municipal Retirees Ontario, Society of Energy Professionals, Stelco, and more. And you have heard us mention CARP they work closely now with CFP as CFP has such a large reach so most of the things that we do with or for CARP the other CFP member organizations are also doing. CARP advocates for improved healthcare and financial security for older Canadians. As a non-partisan association, CARP is committed to working with all parties in government to advocate for older Canadians. They have taken on protecting pensioners as a current focus. CFP is also a member of the Canadian Labour Congress representing unions across Canada and more than 2 million Canadians workers We are also a member of the Canadian Coalition for Retirement Security (CCRS) This is a coalition of over 20 retiree associations focusing on protecting DB pensions in the federal arena, with a particular emphasis on fighting Target Benefit Plan initiatives. Associations include those that represent Retired Teachers, Navy and Air Force, postal workers, CBC, and many more We are in very good company! Patte. 3

4 Pension Committee Update Our last newsletter update concluded with news about CARP s initiative to encourage the federal government to establish a ministry dedicated to seniors issues. And many of you may have signed the online petition to support that proposal. Those efforts were successful, as the big news over the summer period was the appointment of Ms. Filomena Tassi as the first federal Minister of Seniors. The efforts of retirees associations lead to the appointment of a federal Minister of Seniors. Her mission: that the programs offered to the aging population be better adapted to their needs Ms. Tassi will be responsible for a variety of activities to help the government better understand and make decisions on the needs of Canadian seniors and ensure that programs and services are developed that respond to Canada s aging population. This is a big win for CARP and its supporting organizations, which include BPG and the Canadian Federation of Pensioners (CFP), and very positive news for Canadian seniors. BPG members may recall that the spring 2018 federal budget promised a consultation to address our concerns about pension security, particularly in cases where a plan sponsor declares bankruptcy. BPG was subsequently advised by federal officials that this consultation would commence during the summer of 2018 which unfortunately, has not happened. One reason for the delay may be that Ms Tassi s mandate includes playing a lead role in that consultation process, which may have caused a re-evaluation of any plans which had been made prior to her appointment. In any event, we are looking forward to this consultation process as a key opportunity to encourage government action to ensure the security of pensions in Canada. The Pension Committee has been active over the summer months in two proceedings; in each case, BPG was responsible for authoring submissions on behalf of all members of CFP. The first was a federal consultation on a proposed framework for dealing with situations where individuals who have earned a pension cannot be located. The problem is similar to that faced by the banks when an account holder cannot be located. The proposed framework would have no effect on existing pensioners and our comments in that proceeding were focused on ensuring that this would continue to be the case when a final framework is announced. The second process was an initiative by the Canadian Association of Pension Supervisory Authorities (CAPSA) an organization comprising the federal, provincial and territorial pension regulatory agencies. This initiative was aimed at documenting best practices associated with the regulation of pension plans. We were extremely disappointed with the process used by CAPSA and with the resulting draft document representing the product of this initiative. CFP has made its concerns known to CAPSA, in the hope that more meaningful analyses and a broader reflection of regulatory options will be added to the document. Although it is unlikely that meaningful changes will be made, we take a degree of comfort in the expectation that the CAPSA recommendations are unlikely to carry much weight. BPG President s Report For those who have not had a chance to attend one of our Chapter s meetings, a video is available on the BPG website providing the President s Report or click on the image to view the video. Keep up to date with our communications. Visit our website or FaceBook page. 4

5 BPG BOARD OF DIRECTORS 2019 NOMINATION NOTICE Are you interested in joining the BPG Board of Directors? BPG is a group of retirees who work to represent the needs of our members. There is a Board of Directors at the national level. It has 20 members. The term of office is two years. BPG also has seven Chapters: Montréal, Ontario Central, Ottawa, Québec, Southwestern Ontario, Télébec and Aliant Atlantic. We need your commitment and your leadership to ensure the sustainability of our association at all levels. As a Board member, you commit to devote a few hours a month to participate in setting strategy and managing the affairs of the organization At the national level, in general, there is a conference call every two months and two annual meetings face to face. At the Chapter level, each Chapter Chair is responsible for managing local meetings, recruiting new members, and communicating with members. There are several committees in which you can collaborate. If you are interested, you can submit your application using the form below. All potential candidates and their nominators must be BPG members in good standing. The nomination form must be submitted by December 31, 2018 at the latest. The Nominations committee, comprised of Christiane Chabauty, Diane Holgate, Marlyn Easterbrook and Lucie St-Arneault will review the nominations and present a slate of candidates for the elections to be held at the Chapters' meetings. BPG 2019 Board of Directors Nomination Form This form should be used to submit a candidate for the position of Board member. One form is required for each candidate submitted. Both the nominator and the nominee must be members in good standing of BPG. In addition, the nominated candidate must have agreed to allow his or her name to stand for election. Please provide the information requested below and the form by December 31, 2018 to: lstarneault@bell.net NOMINATED CANDIDATE The following person has agreed to be nominated as a candidate to the BPG Board of directors: Name. Address.City/Town Province Postal Code Telephone. .. NOMINATED BY (if applicable) Name Address Province Telephone City/Town.. Postal Code

6 Welcome to the New Members of the Montreal Chapter! Here is the list of former colleagues who have joined the ranks of BPG s Montreal Chapter since the last issue of our newsletter. Danielle Beauchamp Boiteau Gilles Bilodeau Richard Bonenfant Chantal Bonin Larry Call Jean Carrier Michel Charpentier Herb Costello Claude Coutu Carole Desjardins Claire Geneau Carole Haché Claude Lacelle Lucette Leduc Daniel Limoges Lucie Morin Dominique Théberge Jason Ward Thank you to all members for their interest and support. Our organization needs volunteers to be successful. Many positions are available. Contact the directors of your chapter for more information. ****You move or change your address **** This information is not shared with us by Bell. Don t forget to let us know! On line: Change of Address Information Tel.: