Want Your Pension? Give Up Your Severance

For many former Nortel employees, there’s an agonizing deal on the table: if they want early access to their pensions and the retiree medical plan, they have to surrender their claim to severance payments.

“It’s not a fair choice,” Chris Wilson, a former 25- year employee with Nortel in Research Triangle Park, told the News & Observer. “Some people need that money desperately to pay bills, mortgages, and things like that.”

Here’s a copy of the letter that ex-Nortel employees are receiving about the offer:

Subject: Voluntary Waiver of all Benefits under the Nortel Networks Severance Allowance Plan

Dear XXX:

Attached is a waiver of benefits in the Nortel Networks Severance Allowance Plan (”the severance allowance plan”). We are sending this waiver to you as a previously notified terminated employee in the US who has not received any benefits to date from the severance allowance plan. We want you to be aware of this newly-available waiver of severance allowance plan benefits since it may be of interest to terminated employees. The waiver of severance allowance plan benefits may allow an earlier commencement of benefits in the Nortel Networks Retirement Income Plan and the Nortel Networks Retiree Medical Plan. This may be beneficial since a participant cannot commence benefits in these plans until the end of severance payments from the company.

It is important to note that if you waive your benefits in the severance allowance plan, you are also forfeiting your right to make a claim for these benefits under the Chapter 11 claims process. Additionally, if you waive your severance allowance plan benefit, you will not receive credit for vesting service under the Retirement Income Plan during your “standard severance period” (see waiver for definition). Vesting service may be important for you in qualifying for your Retirement Income Plan benefits or to qualify for coverage or subsidies under the Retirement Medical Plan. For these reasons, please consider carefully which of these options has greater value to you before you sign this waiver, Additional details about the impacts of signing this waiver are found in the various sections of the attached waiver document. Please note that you have 30 days from receipt of this letter to sign and return the document to HR Shared Services address shown on the waiver.

If you have questions. please contact HR Shared Services at 1-800-676-4636, Select Option 1, Restructuring.

Regards,
Elena King
SVP Human Resources

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