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Leave Pension Act Alone, Workers' Group Says
By Kevin Barrett, Telegraph Journal
Canada
October 13, 2005
On the eve of an impending Nackawic pension decision by cabinet, a group of non-union pensioners from the St. Anne Nackawic Pulp mill is adamant the provincial government adheres to the Pension Benefits Act when assessing a $13.9 million shortfall in their pension fund.
Hugh Hambly, spokesman for the group of more than 130 pensioners and those eligible for pension from the Nackawic who were 55 years of age and over, says his group cannot support any further losses to the plan, which already sees pension reductions ranging from 13 to 16 per cent.
Citing escalating costs of living primarily from energy costs, the nature of a non-indexed pension, lack of future earning power for current retirees and fears of what changes to legislation may mean for the rest of the province, a working group of representatives presented their position to government officials Tuesday.
"The solution to most of these problems is to leave the Pension Benefits Act alone," the group stated in a position paper.
"As stated by Morneau Sobeco (the government appointed pension administrator) - the pension will be adjusted by the shortfall; then distribution will be according to the pecking order as stipulated in the Act."
The non union fund sits at $41.7 million, some $13.9 million short of its pension requirements.
Training and Employment Development Minister Margaret-Ann Blaney has stated that the province will not use tax payers' dollars to top up the fund.
Instead, government passed a special amendment to the Pension Act last December which allows the government to specifically discuss options for Nackawic Mill pensions, including the possibility of extending the life of the fund.
She said the move was not made to the detriment of the retirees.
But the working group is concerned.
To boost awareness of the issue, the working group is e-mailing all cabinet ministers and MLAs as well as discussing the issue publicly in anticipation of a government decision soon.
There are approximately 130 retirees 55 years or age or older in the non union plan and 73 others in the non union pension plan who are under 55.
"Some of the cabinet ministers don't understand the impact that it is going to have on the pensioners to try to satisfy 73 who have viable futures ahead of them," said Mr. Hambly.
"They still have earning power. If you are 35 years old or 50 years old, you still have earning power. Some of our people are 75 years old and don't have earning power."
Those options include distributing the remaining funds as per current regulations, meaning those 55 and over would get their pro-rated share of the funds remaining and those under 55 would not receive anything.
Another calls for all members to receive up to 75 per cent of their fund and another calls for those under 55 to get 55 per cent of what they are entitled and the remainder going to the pensioners and those 55 and older.
Provincial cabinet meets this morning but Ms. Blaney is in China on a trade mission to promote educational linkages between the New Brunswick Community College system and institutions in China.
"That decision won't come (today)," said Shawn Hearn, a spokesman for Ms. Blaney.
"They have just wound up consultations with the working groups and now the department is preparing options to present to government. That is where we are at now."
The union fund rests at approximately $54 million, some $25 million under-funded. The union represents both those 55 and older and those under 55 and as a result its position is for the government to top up the fund so that all members receive what they are entitled.
Union leaders have not met with the government on the pension issue.
In its statement of position, the pensioner's group made six points to the government.
First, it says they cannot support or afford any further redistribution with rising costs of living and energy, and that they are on a fixed income that is not indexed for cost of living increases.
Second, the pension plan was a non contributory plan set up by the company to encourage staff to remain employed. However, there was a time when members could not transfer their pension if they left the company, providing incentive to stay with the company. Also, the fund affected RRSP contributions over the years.
Third, the retirees wanted to reiterate their request to recognize all retirees and not place undo hardship on those who retired in 2001 but are potentially in added duress because of an amendment that affected their plan that was filed late, thus potentially reducing their pensions.
"These retirees were never notified that any discrepancies pertaining to the amendment existed," said the statement.
"This information was in the possession of the Office of Superintendent of Pensions and the company directors and was withheld from the period of the Fall 2001 until Aug. 23, 2004 - therefore rendering this group defenseless.
Fourth, the group wants to recognize those 55 and older who were working at the mill at the time of the bankruptcy and thus eligible for retirement benefits.
Those workers already face the initial scale back because of the shortfall plus penalties for early retirement - which occurs before 58 years of age.
"If further pro-rated distribution was to take place, some within this group could see retirement benefits as high as a 72 per cent decrease for their rest of their life," said the group.
Fifth, the group questioned the amendment made last December and said that if it needs changing, then it should be changed for all plans, not just the Nackawic group.
"We accepted the government's word at face value when the Hon. Margaret-Ann Blaney stated at various times in the Legislative Assembly that this would not change the redistribution model nor create more hardship to the retirees," the group said.
Finally, the group said it does not have time to make up the shortfall and encourages those under 55 to investigate labour laws and chat with government in launching a claim against the directors of the former owners of the mill.
The pulp mill shut down Sept. 14, 2004 throwing about 400 people out of work. There were about 300 unionized employees and 100 managers working inside the mill when it
closed.
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