Resolute Forest Products pension plans underfunded by $1.9 billion
August 10th, 2012 | Posted in Financial News | 16 comments »
Resolute Forest Products‘ pension plans are underfunded by $1.9 billion and its employees say they have already given up enough to keep the company in operation.
Minimal solvency level not met
Resolute Forest Products has not met the minimal solvency levels in its pension plans regulated by Quebec and Ontario’s funding relief regulations. These regulations, adopted in 2011, affect approximately 80% of Resolute Forest Product’s unfunded pension obligations.
As a result of these new regulations, Resolute Forest Products has until March 2013 to adopt corrective measures to attain the target solvency ratio within 5 years. The company needs to reduce its pension plan deficits by approximately $500 million.
The company says it will work with other plan stakeholders, including employees, retirees, unions and the provincial governments of Quebec and Ontario to develop corrective measures. Resolute Forest Products reports that with interest rates currently near historic lows, the company will work with these stakeholders to develop corrective measures that balance the need to meet their undertakings to retirees, but also to provide the company with the funding predictability they need to manage our business.
Employee reaction
Gary Bragnalo, president of Communications, Energy and Paperworkers Union Local 39 in Thunder Bay, Ontario, said “We did enough. They went and bought Fibrek for a hundred-million bucks. They could have put that in the pension plan. So, if they’re gonna come back and ask for more from the workers, well, I don’t think it’s going to be too long of a conversation”.
Resolute trying to prevent wind up of pensions in Quebec, New Brunswick, and Newfoundland and Labrador
Resolute Forest Products filed a motion with the Quebec Superior Court on June 12, 2012 seeking an order to prevent pension regulators in each of Quebec, New Brunswick and Newfoundland and Labrador from declaring partial wind-ups of pension plans relating to employees of former Abitibi-Consolidated Inc. and Bowater Incorporated operations in these provinces, or a declaration that any claim for accelerated reimbursements of deficits arising from a partial windup is a barred claim under the company’s 2010 creditor protection proceedings.
The company believes that such a declaration would be inconsistent with the court’s confirmation of the plan of reorganization and the terms of the company’s emergence from creditor protection proceedings.
Additionally, a partial wind up plan would likely shorten the period in which any deficit within those plans would have to be funded.
The pension regulators are expected to file contestations to Resolute Forest Products motion by the end of August 2012.
Letter to employees
Resolute Forest Products recently sent a letter to its employees with an update on the pension deficit. In the letter, the company said “the company has no intention of terminating the plan. However, if it were to become necessary to terminate the plan while it has a solvency deficiency, and where the company was not in a position to eliminate the deficiency, your benefits would be reduced.”
Sources:
- Resolute workers have done ‘enough,’ union says - Company and unions have 9 months to agree on corrective measures for pension plans (CBC)
- Resolute Forest Products 10-Q (Filed on 08/09/2012)
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Ah…..the employee’s should have voted “no” several times … but didn’t.
It will NEVER be over for Resolute until all the milk has been drained from this little cow.
I’m sure the CEO’s are already dreaming about their multimillion dollar bonuses after all the employee’s take another hit to save this pension plan.Hell….Resolute may even go ahead and buy out another company after all this…..YEE-HAW !
I can see it now….build the company’s assets to billions of dollars….strip the Unionized work force contracts to 3rd world standards and then after all that, claim that the Unions make it impossible to earn a profit in this market and then sell out to a foreign company and sit back and reep the rewards…..these CEO’s will live like king’s and the Union’s will be left holding the bag and looking like a bunch of spoiled workers who brought down a company do to it’s demand for high wages.
Unfortunately…the Union’s opportunity to make a stand has come and gone a few years ago.I hate to say it but you accepted this.You all voted “yes” to this.Why so surprised ?
I would ate to see this company come into our town and buy our mill.When this process was started a few years ago some people could not beleive that the CEP wanted this bad to save this company on the back of all workers.Today we can see that it was the wrong thing to do.Paper consumpsion is going down every year so the CEP should have left those mill or company that could not survive die so the others could have flourish but instead we have a lot of mills are on the brink.
http://www.tbnewswatch.com/news/228124/A-billion-trees
And of course there is Gravelle shinig with all his glory..Guess my last post was not far off….
Hey Compassnorth63 some of us didn’t have a vote on this issue for your information. Especially us at local 132. We have been waiting 5 long years for our pension and windup so before you start ridiculing us know all the facts first. Been with out a job since 2007 when mill closed her at Fort William Division. We are in the same boat as Kenora as we don’t have a mill to try and restart, because they tore it down in 2010.
Sorry, forgot about the mill’s which had already been closed/idled.
I was at Bowater/resolute for 14 years and just quit a few months ago so I do have knowledge of what I am talking about.I know at the mill I was at we all had a vote through our respective Unions.
I do not mean to come across as “ridiculing” anyone and apologize if I came across like that,I did not mean to.
The past should,at least,should serve as a wake up call to the Union members to be a little tougher,know that “the company” are NOT your friends and ,again, prepare for the possibility of tougher times ahead.You know now whom you are dealing with and as far as I am concerned,they are not to be trusted.
I think there is a bigger plan these CEO’s are following and the survival of the Mill’s may not be at the top of the list.
all the ceo’s care about is getting richer by rippng everyone off
CEP has no reason to bitch. Coles and his cronies are just as bad as the abbi-blow rip off artists. The more the union was willing to give, the company just kept on asking/demanding for more. Face it boys, get out while you can still withdraw what you have left of your pensions or quit your bitching once you loose all of your pensions because you thought your union and collective agreements actually stood for something.
This just shows that we were lucky to keep our past service during the last ccaa negotiations unlike everyone else like Fraser who took 40 percent hits. Now that they’re out of ccaa, screw them were not giving them anymore. No one is thrilled about the last deal but at least this makes me happy we probably got a better deal than I thought if abitibi resolute is crying about it now.
i have a bad feeling the guys down at mersey are going to get screwed over real bad {retirees too}.these miserable bunch of corporate thieves have even f@cked our pension plan! i can’t imagine what the rest {ont and quebec mills} will go thru making up this shortfall! the whole management of this company should be given a blindfold and a cigarette!!!!!!
Absolutely true. I went through the same thing with Pope & Talbot. Once a company enters ccaa you can not apply for your pension, and your pension underfunding will be at the bottom of list of creditors. The lawyers take their money first, then the banks, then the secured creditors and then the unsecured creditors, and finally the pension holders. You will all find out far too late that the legal level of solvency for a pension fund is 60%. So, if yours is under that, it is probably closer to 50%. The company will try to blow smoke up everyones a$$ in order to stop a run on the pension fund, but for your own good, apply for your pension now before it is too late.
Rolling’s posting is the exact, hard truth. This same thing happened over a century ago to the horse and buggy. Less paper is used(we all know why), so the higher cost mills should close, so the lower cost ones can survive. Just happened with Tembec, and their closing of Pine Falls. The local people and economy are not happy there , of course, But as a result Kapiskasing has a full order book and can continue to run. I seriously doubt the folks at Soucy or Papiere Mason are overjoyed about the restart of Stadacona. Abish@tty should have died on the vine, creditors should have been allowed to dismantle the bad and keep/sell off the good.
Remember back when the markets were on a roll and the interest rates were sky high …the Abitibi Pension Plan was so rich that it was overfunded. Instead of modernizing the mills here in Canada, with the approval of the Federal and Provincial Governments Abitibi took from the Pension Plan monies to purchase shares in companies like Pan-Asia which turned out to be a flop. The money was suppose to be put back into the Pension Plan over the following years ..but never was! That was Our Governing Regulations protecting us ..HA!
They could afford to change the company name and probably pay off some of the ” Golden Handshakes” that were made coming out of bankruptcy protection …Oh I forgot they are now hiding behind the name change!
I guess they don’t have many more dams to sell off ..
Just another way these big companies are filling their own pockets, they could give a shit about the workers that are making them the profits. They put us in CCAA and then we bail them out by taking a 10% cut in wages and go to 2.2 on our vacation pay, pay our own STD, freeze our 72 Pension Plan and start a new one (that is not even registered yet) and the CEO gets a bonus for bringing Desolute out of CCAA. What a F**king joke. I say if they can’t pay up the 72 plan (bought Fibrek for 100′s of million $) give us back the money we have put in the new pension plan and we will invest that money ourselves. Richard Garneau should have his head examined, plant another tree Ricky. As for the Liberal Goverment (Ontario) and the PC’s (Federal) they can help by imposing payment to the Pensions Plans
Our mill is still viable in Fort Frances but Resolute refuses to sell it even though they have buyers and the gov’t isn’t doing anything to help us. Resolute has shutdown pm. 5 and the kraft mill but kept pm. 7 running until they can transfer their wood rights to Thunder Bay. C.E.P. National has told the members that their concessions were taken to save the pension plan in order to get the members to accept the deal. Which is B.S. So you can see that the national union and gov’t are in cahoots with the companies.
This was seen by many people as something which was inevetible; although our hands were tied.
“You have to pay big bucks to keep the best and wisest of CEO’s”, is a statement which I vomit over. If anyone expressed dissatisfaction with the company, you were either fired, or encouraged to quit in other ways.These corporate gangsters should be taken to task, but then again, their buddies are also government people—all “honourable people”.
Force the bastARDS TO SEEL OFF EVERYTHING AND PUT THE CORRECT MONEY IN THE PENSION PLANS, BUT THAT WILL NEVER HAPPEN, BECAUSE ALL THEIR BUDDIES WILL DIG INTO THE TROUGH BEFORE THEY LEAVE anything FOR THE PENSION. CHANGE THE NAME OF THE COMPANY AGAIN; REMEMBER, YOU CAN PUT LIPSTICK ON A PIG, BUT IT WILL ALWAYS BE A PIG.
The CEP National union and our federal conservatives are helping Resolute to not pay back the pension deficit, they will all get their pensions so why would they give a shit what happens to the pensioners