Who knows what finally pushed Canada’s government to act (it is an election year, after all), but the country’s feds at last are heeding Ontario-based Nortel Networks’ pensioners calls to guarantee their monthly payments.
Pensioners have pleaded for the past year for their elected officials to take action – the requests largely were ignored, and who knows why. A number of observers are speculating it’s all about retaining elected office.
That’s because now, a little more than a year after Nortel filed for bankruptcy, Finance Minister Dwight Duncan is said to be addressing the issue. An anonymous source told The Globe and Mail that Duncan will provide either a grant or loan to Ontario’s Pension Benefits Guarantee Fund after Nortel emerges from court protection. And no one yet knows who much the grant or loan will cost. But according to estimates from The Globe and Mail, Nortel’s pension deficit totaled between $2.5 billion and $2.8 billion when it went bankrupt.
“The minister is providing reassurance to Nortel workers that the Pension Benefits Guarantee Fund will be in place,” the source told The Globe and Mail.
Duncan’s move comes after Nortel pensioners again begged the government to protect their assets. Last week, ex-staffers pressed federal officials in Ontario to create an agency to watch over pension plan assets abandoned by insolvent employers, the Ottawa Citizen reported.
Pensioners also want politicians to beef up coverage, guaranteeing availability of the first $2,500 of monthly income, rather than $1,000. Duncan’s plan, however, only guarantees coverage up to the first $1,000.