The fallout from bankrupt Nortel Networks retiree-benefits cutoffs has begun.
Earlier this year, the insolvent telecom equipment maker got court permission to stop paying thousands of pensioners their insurance and benefits at the end of the year. Now, in Canada alone, at least dozens of elderly ex-Nortel workers are giving notice to their retirement homes that they wont be able to afford monthly expenses after December. And one couple in particular, Greg and Sandra Carleton, figure theyll have to sell their home, which has been in the family for generations, to cover their retirement.
Greg Carleton worked in Nortels wireless research department for 12 years; he retired in 2006. He told the Ottawa Business Journal this week that he didnt even know Nortel was severing employee and pensioner benefits until a friend told him Nortel has yet to send any correspondence on the matter. Worse, the Carletons benefits are paid for through Nortel, not independent Sun-Life Financial, which means they will lose all disability, survivors and health coverage.
“Nortel has not issued any advice to us,” Greg Carleton told the Ottawa Business Journal. “They were (also) like that when I worked there extremely secretive.”
Greg Carleton now is considering finding a job, but hes frustrated that hed likely end up at a retail big-box store.
The bigger picture, though, is the instability of thousands of ex-Nortel employees futures. There could be political help from Canadas legislators but its not looking likely, leaving pensioners to question old decisions.
I sure would have looked for something else, Greg Carleton said.
Sandra Carleton agreed.
“What we’re being told is when you retire, you have to assume the debt of the company you were working for, she told the Ottawa Business Journal.
Nortel now is trying to convince bankruptcy courts in the United States to let it end retiree benefits there as well.
Nortel filed for bankruptcy in January 2009 after years of financial struggles stemming from competition and an accounting scandal.