Former workers of NewPage Port Hawkesbury in Nova Scotia were told this week that they have been overpaid and will each have to pay back thousands of dollars.

Morneau Shepell Ltd., the current pension plan administrator, sent out letters to the pensioners telling them how much they will have to pay back, and blamed the calculation error on the previous plan administrator, Aon PLC.

The mistake was made while calculating the early retirement provisions years prior to the idling of the mill in 2011.  About 200 people who opted to take a specific front-loading pension option are the pensioners who are now said to have been overpaid, and owe a collective $5 million. Some people have found out they have been overpaid as much as $60,000.

Paul Chang of Morneau Chapelle, said the letter that went out to pensioners was not a bill. He said it simply informed them what they would owe if Morneau Chapelle isn’t able to recover the money from Aon PLC.

The topic was raised this morning by members of the Nova Scotia legislature’s public accounts committee.

Nancy MacNeill Smith, Nova Scotia’s superintendent of pensions, told the committee she has no authority to fix the mistake and that Aon PLC should repay the money.

Labour Minister Marilyn More said although the government is monitoring the situation and is in contact with Morneau Chapelle, there’s really little it can do in the end.  “At this point I’m not sure that there are any options that government has. This is a private pension plan and the premier is already on record as saying that we’re not going to be spending taxpayers money on private pension plans.”

The pension plan for these workers is already underfunded $140 million.  The Government of Nova Scotia passed legislation in the spring to delay the windup of underfunded pension plans at the NewPage Port Hawkesbury mill for 11 years hoping for a recovery from low investment returns.

Pensioner Blair Samson told CBC, “I think it’s going to be devastating. I think you’re going to see Nova Scotians from our end that worked at the mill go on welfare because I don’t understand how they can make these payments.”

Samson said his pension is 34% smaller than he anticipated and he has been told he owes $18,000 because of the calculation error.

Read more:
NewPage pensioners told to pay back thousands (CBC)
Error may cost former mill workers millions (Metro)