(Queen’s Park, Toronto)  – Carleton-Mississippi Mills MPP Norm Sterling today introduced a Private Member’s Bill which, if passed, would give existing Nortel pensioners or their survivors two options on the wind-up of their pension fund.

At present when a pension plan is wound up, the Financial Services Commission of Ontario (FSCO) can only purchase a life annuity on behalf of a pensioner for the value of the pension.  With interest rates low, annuities are providing low benefits.

Pensioners are taking a double hit.  Firstly the value of their pension is reduced to an estimated 69% because the plan was underfunded when Nortel filed for bankruptcy protection.  Secondly their only option, a lifetime annuity, is a poor investment at this time.

“Time is of the essence for Nortel pensioners as their plan could be wound up any day by FSCO,” said Mr. Sterling.  “My Bill will be debated on November 26 and I certainly hope that all Members of the Legislature will see its importance and support it and that the McGuinty government will call it for third and final reading quickly.” 

Mr. Sterling’s Bill will give pensioners or their survivors another option to roll their reduced pension into an RRSP or another prescribed retirement savings arrangement.  Pensioners can then decide to keep this arrangement or buy an annuity when market conditions improve.

Oddly, the present rules provide these two options to members of a pension plan who have not yet begun to receive pension benefits, but not for those already receiving a pension.

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For more information, call Carleton-Mississippi Mills MPP Norm Sterling at: (416) 314-7900