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NRPC is a non-profit member-supported organization for Canadian former employees of
Nortel Nortel Networks Corporation (Nortel), formerly Northern Telecom Limited, was a Canadian multinational telecommunications and data networking equipment manufacturer headquartered in Ottawa, Ontario, Canada. It was founded in Montreal, Quebec, ...
. It was formed after announcements in the media that Nortel Networks, a large multinational telecommunications company, had entered
bankruptcy proceedings Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor ...
in several countries.


Constituency

Most of the members of NRPC are entitled to a defined benefit pension; however, it is not clear how many are entitled, now and in the future, to medical benefits and other benefits from Nortel. In his statement to the Finance Standing Committee on March 25, 2010, Don Sproule, president of the NRPC, stated that 11,000 pensioners or surviving
spouses A spouse is a significant other in a marriage. In certain contexts, it can also apply to a civil union or common-law marriage. Although a spouse is a form of significant other, the latter term also includes non-marital partners who play a social ...
are entitled, and 700 pensioners or surviving spouses are not entitled to medical benefits. The implication is that roughly 8,000 former employees are not now, nor will they in the future be, entitled to medical benefits. However, according to Barry E.Wadsworth, Associate Counsel
Canadian Auto Workers The Canadian Auto Workers (CAW; formally the National Automobile, Aerospace, Transportation and General Workers Union of Canada) was one of Canada's largest and highest profile labour unions. In 2013, it merged with the Communications, Energy and ...
representing unionized Nortel former employees, all individuals currently receiving a pension are in receipt of medical benefits. According to an Oct 13, 2016
Reuters Reuters ( ) is a news agency owned by Thomson Reuters Corporation. It employs around 2,500 journalists and 600 photojournalists in about 200 locations worldwide. Reuters is one of the largest news agencies in the world. The agency was esta ...
article there were 22 thousand participants in
Nortel Nortel Networks Corporation (Nortel), formerly Northern Telecom Limited, was a Canadian multinational telecommunications and data networking equipment manufacturer headquartered in Ottawa, Ontario, Canada. It was founded in Montreal, Quebec, ...
’s underfunded
pension plan A pension (, from Latin ''pensiō'', "payment") is a fund into which a sum of money is added during an employee's employment years and from which payments are drawn to support the person's retirement from work in the form of periodic payments ...
in 2009.


History

On January 14, 2009, Nortel Networks initiated financial restructuring under the
Companies' Creditors Arrangement Act The ''Companies' Creditors Arrangement Act'' (CCAA; french: Loi sur les arrangements avec les créanciers des compagnies) is a statute of the Parliament of Canada that allows insolvent corporations owing their creditors in excess of $5 million to ...
(CCAA) in Canada. At that time, Nortel Networks stopped paying severance packages, transition allowances, and deferred wages to former employees and
retiree A pensioner is a person who receives a pension, most commonly because of retirement from the workforce. This is a term typically used in the United Kingdom (along with OAP, initialism of old-age pensioner), Ireland and Australia where someone of p ...
s. NRPC was started by volunteer Nortel
pensioner A pensioner is a person who receives a pension, most commonly because of retirement from the workforce. This is a term typically used in the United Kingdom (along with OAP, initialism of old-age pensioner), Ireland and Australia where someone of p ...
s from Ottawa in an effort to obtain court approval to have this
non-profit organization A nonprofit organization (NPO) or non-profit organisation, also known as a non-business entity, not-for-profit organization, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in co ...
sponsored by Nortel Networks. The organizers quickly formed an
ad hoc Ad hoc is a Latin phrase meaning literally 'to this'. In English, it typically signifies a solution for a specific purpose, problem, or task rather than a generalized solution adaptable to collateral instances. (Compare with '' a priori''.) C ...
committee and organized several mass meetings in several Canadian cities. The meetings were announced at NPYG (Nortel_Pension
Yahoo Group Yahoo! Groups was a free-to-use system of electronic mailing lists offered by Yahoo!. Prior to February 2020, Yahoo! Groups was one of the world's largest collections of online discussion boards. It allowed members to subscribe to various grou ...
) a self-help group formed in 2002 for employees, ex-employees, retirees and family members of Nortel Networks. Word quickly spread and the local Ottawa media started paying attention. NRPC announced their first (Montreal-only) website on January 23, 2009. On February 14, 2009, the Ottawa branch of the NPRC opened its website. On May 16, 2009, the Montreal website of NRPC started directing traffic to the newly formed NRPC website.


2009 representation order and incorporation

In an order issued by the Ontario Superior Court of Justice on May 27, 2009, Donald Sproule, David Archibald and Michael Campbell were appointed representatives of, and the law firm Koskie Minsky was appointed as legal counsel for, all former Nortel employees, with the exception of some unionized employees. In September 2009, the NRPC incorporated as a not-for-profit organization.


Agreements between Nortel and the NRPC


February 8, 2010, agreement reached with Nortel on behalf of all former employees

On February 8, 2010, NRPC announced it reached an agreement (awaiting court approval) with
Nortel Nortel Networks Corporation (Nortel), formerly Northern Telecom Limited, was a Canadian multinational telecommunications and data networking equipment manufacturer headquartered in Ottawa, Ontario, Canada. It was founded in Montreal, Quebec, ...
in which Nortel would advance $57 million to fund medical and life insurance benefits for some Canadian pensioners and their survivors, and provide long-term disabled employees with wage-replacement, medical and life insurance benefits until December 31, 2010. It is unknown how many ex-employees will benefit from this agreement. In return, NRPC agreed: * to not oppose any Nortel employee incentive program. * that the claims of continuing and former Canadian employees of Nortel will be treated as unsecured claims, unless there is a change to the
Bankruptcy and Insolvency Act The ''Bankruptcy and Insolvency Act'' (BIA; french: Loi sur la faillite et l'insolvabilité) (the ''Act'') is one of the statutes that regulates the law on bankruptcy and insolvency in Canada. It governs bankruptcies, consumer and commercial prop ...
. * that Nortel will stop topping-up its underfunded pension plan after the last payment made in March 2010. * that Nortel will be released from liability regarding the pension plan or the Health and Welfare Trust except for claims based on fraud, gross negligence, contractual rights, or misrepresentation by the directors or wrongful or oppressive


Opposition to February 8, 2010, agreement

A group of Nortel former employees have retained the services of Rochon Genova LLP to voice their opposition to the February 8, 2010, agreement in court. Other creditors also opposed the agreement. The ''
Ottawa Citizen The ''Ottawa Citizen'' is an English-language daily newspaper owned by Postmedia Network in Ottawa, Ontario, Canada. History Established as ''The Bytown Packet'' in 1845 by William Harris, it was renamed the ''Citizen'' in 1851. The new ...
'' reported on March 4, 2010, that the dissident Nortel employees objecting to a deal with Nortel lost their first battle in Ontario court. However, the ''
Montreal Gazette The ''Montreal Gazette'', formerly titled ''The Gazette'', is the only English-language daily newspaper published in Montreal, Quebec, Canada. Three other daily English-language newspapers shuttered at various times during the second half of th ...
'' reported on March 5, 2010, that the judge may veto this agreement. The ''Ottawa Citizen'' reported on March 6, 2010, that Ontario Superior Court Justice Morawetz would issue a ruling within week.


Rejection of Nortel pensioner deal by the court

On March 26, 2010, Ontario Superior Court Justice J. Morawetz rejected the February 8, 2010 agreement. Siding with the noteholders and the official committee of unsecured creditors, Justice Morawetz concluded that the agreement was unfair to non-employee creditors. He said the agreement was flawed because it created risk instead of eliminating uncertainty, referring to a clause in the agreement that allows Nortel pensioners, long-term disability recipients and others to demand a bigger share of Nortel assets if federal bankruptcy rules change in future. The condition is unfair to other creditors because it requires them to make concessions in favour of the former employees and long-term disability employees today, and be subject to the uncertainty of unknown legislation in the future.


Reduction of benefits in 2011

A letter sent to Canadian pensioners in July 2011 from the Nortel pension administrator Morneau Shepell announced that pensioners in Canada would have their benefits cut. A webinar held by the legal firm Koskie Minsky on July 22, 2010, addressed some of the questions raised. The windup of the $5 billion Nortel pension plan began in October 2010. Between that time and July 2011, Nortel pensioners had been receiving their full pensions even though actuaries have determined that the pension trust is underfunded by $1.5 billion. The reduced payments are to retroactively reflect those overpayments. According to the ''Toronto Star'', about 12,000 current Nortel pensioners face benefit cuts of as much as 43 per cent, depending on their province of residence and where they worked for Nortel, which filed for protection from creditors in January 2009. In Ontario: * unionized members will get 75 per cent of their non-indexed pensions * non-managerial staff will get 70 per cent. Outside Ontario: * union members will get 59 per cent of their indexed pensions * non-union pensioners will get 57 per cent.


See also

*
Nortel Nortel Networks Corporation (Nortel), formerly Northern Telecom Limited, was a Canadian multinational telecommunications and data networking equipment manufacturer headquartered in Ottawa, Ontario, Canada. It was founded in Montreal, Quebec, ...
*
Financial Services Commission of Ontario The Financial Services Regulatory Authority of Ontario (FSRA; french: Autorité ontarienne de réglementation des services financiers) is a self-funding Crown agency which acts as the financial regulator for the province of Ontario, Canada. Esta ...
*
Employee Retirement Income Security Act The Employee Retirement Income Security Act of 1974 (ERISA) (, codified in part at ) is a U.S. federal tax and labor law that establishes minimum standards for pension plans in private industry. It contains rules on the federal income tax e ...


References


External links

* http://www.nortelpensioners.ca/ * http://finance.groups.yahoo.com/group/Nortel_Pension/links/Deal_001268180590
Nortel Pension Information at Morneau Shepell (Morneau Shepell is now LifeWorks since May 2021)
{{DEFAULTSORT:Nortel Retirees And Former Employees Protection Canada Retirement in Canada Pension funds Nortel Pensions in Canada