Will Fraser Papers pensioners lose up to 40% of their pension benefits?
More than 1,000 retired paperworkers could lose up to 40% of their pension benefits as another major pulp and paper company – Fraser Papers – seeks to cut its debt on the backs of workers.
“These are the latest victims of employers hiding behind bankruptcy legislation – taking pensioners money to pay off investors,” says Dave Coles, president of the union that is fighting the company’s action in court and at the political level. “This is devastating news for these people – many could face poverty.”
Fraser Papers, which filed for bankruptcy protection last June, informed the union this week that it would seek court approval to ‘wind up’ the pension plans of its 1,000 pensioners. The company owes $171 million to its pension plans, which represents a shortfall of up to 40%. The court date is set for Dec. 2nd in Toronto.
The Communications, Energy and Paperworkers Union has sent an alert to all pensioners spelling out the danger for their future and telling them to move quickly to contact their federal and provincial elected officials.
Mr. Coles is meeting with New Brunswick government officials Nov. 17th today to discuss the union’s proposal for a pension trust that will continue to provide benefits. Creation of the trust would mean that pension plans would not ‘wind up’ but rather, would continue to operate. This requires government support and regulatory approval, but no cash infusion from governments.
“The CEP proposal is a plausible solution that can avert catastrophy for thousands of pensioners, says Coles, “but only if politicians drop ideologies and help vulnerable retirees – our proposal does not require a financial bailout – just compassion and the will to do the right thing.”
“Our union has worked with actuaries and pension experts on this solution which provides the guarantee of stable retirement income, and gives governments the opportunity to solve a growing social and economic problem at very little cost.
The Fraser Papers mill in Edmundston, New Brunswick, employs about 425 workers. Most worked at the Edmundston mill. Others worked in Atholville, N.B., Thurso, Quebec and Thorold, Ontario. Many of the retirees worked for Noranda Forest Products or Maclaren Paper, which later became Fraser Papers.
CEP is working on creating a trust for AbitibiBowater pensioners who face a similar fate. The union has met with provincial governments and has contacted the Minister of Finance and all opposition leaders in the House of Commons.
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