Finance ministers meeting tomorrow in Whitehorse on pensions are being urged to deal with the plight of tens of thousands of pensioners who will see significant benefit cuts as their employers face bankruptcy.
The union representing forestry workers and the Nortel pensioners association - two organizations that speak for those pensioners - have today sent a letter to the finance ministers asking them to "make sure we don't abandon pensioners and other workers, who through no fault of their own, face major cuts to their retirement and replacement incomes because their employers took refuge in the bankruptcy courts."
The Communications, Energy and Paper-workers Union of Canada and the Nortel Retirees and former employees Protection Canada (NPRC) are proposing a solution to protect orphaned pension plans that offers a win-win situation for companies, workers, retirees and governments.
They are calling on for a National Pension and Investment Fund to be jointly or distinctly run by federal or provincial regulatory bodies for pension plans. The fund turns on the idea that the pension plans of employers facing bankruptcy be allowed to continue to exist in a trust fund, rather than being terminated. The fund would be administered with a long-term perspective, as are the CPP and QPP. This requires government support and regulatory approval, but no cash infusion. The NRPC has taken the NPIF concept to the Ontario government asking them as a matter of urgency to establish an Ontario Pension Orphanage with day-to-day operations administered by a government agency.
"A string of bankruptcy filings since January - from Nortel, to forest giants Abitibi-Bowater and Fraser Papers, and most recently Canwest, has made it alarmingly clear that employers can legally up and walk away from their pension obligations," says CEP President Dave Coles. "They can hide behind bankruptcy legislation to take pensioners money and pay off investors."
"But what's even more alarming, is that governments at all levels have been slow to take advantage of a relatively simple solution that would help us all sleep better at night."
Don Sproule, National Chair of NRPC said: "In order to protect pensioners whose plans are in imminent danger, it is vital that Finance Ministers act immediately to prevent plans from being wound up, and to amend bankruptcy laws to give pensioners higher priority. This way pensions can be protected and refinanced without negative impact on the public purse".
"The future of many vulnerable retirees is at stake," concludes Mr. Coles. "These are people who are already living on a tight budget, many are in ill-health and these cuts will drive them into poverty and despair. Hopefully the finance ministers will give this proposal the serious consideration it deserves."
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