(Queen’s Park, Toronto) – More than a year after Nortel filed for bankruptcy protection and Nortel pensioners and pension plan members started pleading for help, the McGuinty government is just now announcing it will live up to its existing obligation by funding the Pension Benefit Guarantee Fund. 

“This government’s slow response has left Nortel pension plan members in limbo for a full year,” said Carleton-Mississippi Mills MPP Norm Sterling.  “And even after a year, the McGuinty government is only announcing it will live up to existing legal obligations when a more creative solution like that taken in Quebec would have offered more security at a lower cost to taxpayers.”

According to news reports, Finance Minister Dwight Duncan will announce funding (in the form of either a loan or a grant) to the badly underfunded Pension Benefits Guarantee Fund (PBGF) so that Nortel Pensioners will receive up to $1,000 per month should their pension plan fail.  The PBGF has been so badly underfunded since the McGuinty government took power in 2003 that in the 2009 Budget the government changed the law to allow the Finance Minister to unilaterally make loans or grants to the fund and at the same time stipulated that the government is not obliged to bail out the PBGF.  These contradictory changes left Nortel pensioners wondering what their futures would hold.

“This solution, funding the PBGF, is the easiest and most expensive solution the McGuinty Liberals could find,” said Mr. Sterling.  “Quebec has found a better solution whereby the provincial regulator will take over the management of the remaining pension assets so the plan will continue to exist.  I offered another solution which would have allowed pensioners to transfer their share of the plan into a RRIF or another prescribed retirement savings arrangement instead of being forced to put it into an annuity which offers a very low benefit right now.”

Coincidentally this announcement is being made during by-elections in the two Eastern Ontario ridings of Ottawa West-Nepean and Leeds-Grenville. 

-30-

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