No Relief for Ontario Pensioners

The worst part of this is the gov't of Ontario is currently writing legislation and hoping to pass it soon so that the Ontario Pension Benefits Guarantee Fund will not be liable if we have a major pension failure and they don't have the money to cover the loss. IE: Nortel, GM, Etc.

So they are also going to change the law to cover their butts and prevent the hugh law suites that will likely follow.

After Dalton gets done explaining this action maybe he can also explain why Ontario Employment Standards Act has FALSE STATEMENTS, and an Ontario Superior Court Judge does not even explain to the public why we have FALSE STATEMENTS in our Ontario laws. Ya, ya, I know that CCAA is a federal act and supersedes any PROVINCIAL legislation, blah, blah, blah … That is not an answer to these fundamental questions (applicable in other provinves as well):

WHY DO WE HAVE FALSE STATEMENTS IN OUR PROVINCIAL LAWS?

WHAT OTHER “LAWS” DO WE HAVE IN ONTARIO THAT ARE LIES?

HOW CAN SUCH A FUNDAMENTAL LEGAL ISSUE BE COMPLETELY IGNORED IN THESE PROCEEDINGS?

WHAT ARE THE PROVINCIAL AND FEDERAL GOVERNMENTS GOING TO DO ABOUT THIS?

NO ONE, AND I MEAN NO ONE, NOT NORTEL EXECUTIVES NOR HR, NOT A JUDGE, NOT THE GOVERNMENT OF ONTARIO, NOT THE GOVERNMENT OF CANADA, NOR ANY SINGLE LAWYER OF THE HUNDREDS ON THE NORTEL CASE FOR ALL PARTIES, NO ONE ON THIS BLOG, NOTHING IN THE MONITOR'S REPORT, NO STATEMENTS FROM THE COURTS, NO NEWSPAPER OR MAGAZINE, NO WEBSITE THAT I CAN FIND, NO COLLEAGUE OR FRIEND, NO ONE, HAS ANSWERED THIS FUNDAMENTAL QUESTION!

HERE IS AN EXCERPT FROM THE ONTARIO WEB SITE:
An employee is not entitled to severance pay if he or she:
• has refused an offer of "reasonable alternative employment" with the employer;
• has refused "reasonable alternative employment" that is available to the employee through a seniority system;
• is severed and retires on a full pension (not including Canada Pension Plan benefits);
• has his or her employment severed because of a strike, as long as the employer can show that the economic effects of the strike caused the closing of part or all of the business;
• is employed in construction, including employees who are working off-site and who are commonly associated in work or collective bargaining with employees who work at the construction site;
• is employed in the on-site maintenance of buildings, structures, roads, sewers, pipelines, mains, tunnels or other works;
• is free to choose whether or not to work when the employer offers him or her work, and the employee is able to refuse work when it is offered, without penalty;
• is guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and was not condoned by the employer; or
• has lost his or her employment because the contract of employment is impossible to perform or has been frustrated by an unexpected or unforeseen event or circumstance. THIS DOES NOT INCLUDE BANKRUPTCY OR INSOLVENCY or when the contract is frustrated or impossible to perform as the result of an injury or illness suffered by an employee.

Upon passage of the new legislation, I'm guessing the word "Guarantee" will be quietly dropped from the name of the program.

Big 'atta-boy to Dalton for all his hard work and dedication to the people of Ontario.

Oops, sorry 'bout that guys. Better luck next time.

Love,
Dalton M.

:)

PS And come on, you didn't actually believe me now did you? I just say things to make me look good. Surely by now no-one would expect me to follow through on anything?

http://en.wikipedia.org/wiki/On_Bullshit

Interesting set of comments. Lots of differing perspectives

Surely, one of the critical elements to all of this is one of integrity. Right or wrong, Nortel had a commitment to its employees (past and present) to pay an agreed pension (well defined). They also had a legal obligation to pay severance. They have defaulted on both of these commitments. Regardless of prior management the obligation is one that Mike Z signed up to when he took on the CEO job. And of course, Mike and team are the ones that made the decision to not deliver.

Right or wrong, the Province of Ontario setup a fund to "Guarantee" and protect its citizen's pensions (to a max of $1000/month) in the event of a corporate bankruptcy. It took money from companies and taxpayers in the province to fund it. In fact, the funds endangerment and the large underfunding in the pension plans of companies like Nortel and GM was allowed to happen due to compromises and concessions granted by one of his predecessors as Premier (who shared the same party affiliation). Whether right or wrong in anyone's mind, these are commitments from the Province that people are legally entitled to receive. And of course, another in a string of broken trust built by the premier.

And of course, in our system the concept of one group of people paying for another is a fundamental element of all policy - Employment Insurance, Welfare, Public Health Care, Bank Bailouts to mention a few.

Public "oops we didnt really mean it" and "blame it on the downturn" seem to be all too common rationales for leadership (in this case corporate and gov't) breaking commitments to pay for other choices they are making. Hopefully the court of public opinion will hold them all accountable at the end of it all. At least in an ideal world (which this isnt)

I hope so, but this shall never make a real payment in good money. Really sad for all this former colleagues.

so what is worse. Ontario Pension fund or Nortel pension fund. Interesting that both the Ontario premier McGuilty and Nortel CEO Zeroman treat it so casually that there is a shortfall. I hope and pray a day comes when these two idiots have to go on welfare to really understand what people must be going through.

I think Nortel pension fund may be in better shape, at least it seems to have more money

On a per pensioner basis, the NT pension fund may not hold the same favor.

as long as there aren't lump sum payments, I think NT pension can hold its own, specially after the market recovers in a few years.

So the Ontario pension guarantee fun has been managed even worse than the US's? That's impressive.

It's not like the government couldn't have seen these problems coming.

Exactly. And yet they kept taking money for a program that they knew wouldn't deliver.

Clearly, they weren't taking anywhere near enough money, or the fun wouldn't be in such trouble.

Dear Nordollars,

We will be announcing the new round of workforce reductions by the next week(may be on wednesday.) so I come to this AAN blog to see if you are all ready yourselves to this great and enormous natural event. I want only a thing from you, pls do not think your severances, bonusses or whatelses, we will pay all this rights to you may be at some time in the future or not:). So this mustn't be a tragedy or at least a problem too you. Go and live happily with the money we gave you as a severance package.0$$$

NT Plane Hitch'Hike'r,

Dear Pensioners,
We know the title may sound misleading, but contrary to what you may believe, our Pension Benefits Guarantee doesn't guarantee you will get anything, it's simply that we thought it was a pretty name and thus we kept it. Sorry for the confusion and better luck next time.

-Director of the fund

P.S.: Our referring to you as "Pensioners" isn't intended to be degoratory in any fashion. Life expectancy is way up, and new studies prove we can remain full of vim and vigor well into our 70a and 80s.
Retirement is over-rated, and can even lead to mental and physical stagnation. So, Thelma! Earl! Get a job! Continue to live Life to its fullest and you are virtually guaranteed to be rewarded with copious praise over your new jobs done well.

Yes, we are living older and in better health than our predecessors. OK, the retirement at 65 may be over-optimistic from a funding point of view and debilitating from a public health one.

But a contract is a contract and our NA (former) colleagues are entitled to these benefits, aren't they?

Therefore it is a pity they are pushed to resume a professional activity.

Never sure sure whether Less is joking or not.

I'm okay with working as long and much as I can beyond 65. I just don't want to live under a bridge after all I've contributed to the Team; the very bridge MIke Zs limo driver takes to deliver his Leader of Men to the golf course..

Idle hands beget idle minds beget empty promises. Nortel leadership is a paradigm thereof.

good addition :)

We didn't mean to say "Pensioners"... spelling error. Meant to say "Prisoners"..... our bad.

wannabe pensioners could also fit

Un-be-lievable.

Nortel: "Sorry, we're running low on cash so out the door you go with no severance. I know we had a contract with you, but we have to preserve our cash for bonuses and lawyers. Oh, and we mismanaged your pension fund so you won't be seeing a lot of that either. Damn economy"

Ontario: "Sorry, we can't afford to protect your pensions. I know we took your tax dollars anyway but we spent that on other stuff. Damn economy."

The gross incompetence never ends. The only aspect of this tragedy that would be playing out differently in a strong economy is that it would be easier for the displaced Nortel employees to find new jobs.

Ontario: "Sorry, we can't afford to protect your pensions. I know we took your tax dollars anyway but we spent that on other stuff."
... The gross incompetence never ends.

Are you for real? You expect the ten or so million other Ontarians to cover your pension because the company you chose to work for screwed up? The entitlement never ends for you clowns, does it? And you complain about Z. You'll take whatever you can grab just like his crowd. You're all the same.

Try working in the real world.

Oh, that's right, you do now. And minimum wage iust went up 75 cents/hour in Ontario. Lucky you.

are you stupid, on crack or just escaped from the asylum. Government pensions cover a lot of companies, which they get from taxpayers and corporate taxes. If they cannot guarantee pensions they should dismantle it.

Same with the Canada Pension Plan the federal equivalent. Every tax payer is paying a premium. If they go belly up then what use is government? And whay should they tax people for promises they cannot keep.

"If they go belly up then what use is government? And why should they tax people for promises they cannot keep."

You nailed it. And I'm not being facetious. They are the exact questions that led to the United States of America.

Those are cogent questions that go to the heart of what's really being discussed here. Nortel's just the cover.

Already told ya.
The provincial gov't has lots of money for the arts, official bilingualism, refugee status, ohip fraud, special interest groups, the green machine and multiculturalism.
They don't have money for the hard working honest people who have worked and lived in Canada for years.
It's a havenot province for this group.

Vote for the NDP next time

are you stupid, on crack or just escaped from the asylum

Me, I'm hooked the feeling
I'm high on Believing
that Nortel
stills love thee

The Ontario Pension Benefits Guarantee Fund is for everyone in Ontario, or at least it used to be. It is not "entitlement" as you put it that make Nortel pensioners expect assistance. Rather, it is the fact that it is a social service that was supposed to be available in these types of circumstances. To be excluded "because" of the company one worked at is problematic. Since I still work at Nortel, and Mr. McGuinty has said that the plan is not available to Nortel employees, should I then be able to opt out of paying for it?

People have spent a large portion of their lives working for Nortel, and expected to be treated better than they are. Please stop talking about entitlement as if they are a bunch of spoiled brats. Promises were made to these people that are now being broken. Their entitlement to their pension is a fact whether you like it or not.

It is natural to be disappointed and angry in these circumstances.

Guy, the world has changed. No one owes you anything. If you agreed to work for a company and in exchange the company guaranteed you compensation then fine. But expecting the rest of the country to come to the rescue because because your counter party reneged on the deal is naive. It simply doesn't work that way anymore.

It's all poof! Gone. Check out South Park on Youtube.

I'm not affected by the Nortel debacle and I don't live in Ontario.

I expect companies and individuals to live up to their commitments.

No government should tax people for benefits that it is unable or unwilling to provide. I personally don't think that the Ontario government should use taxpayers money to bail out NT (or any other) pensioners, but I think it's fraud to tax people and say that you will, and then not deliver.

Buy $100mio Nortel stock, let it sit 6-8 months and it will have tripled in value by then,
I believe.

Hey, you are quite right, i agree with you on this.

Jessica

I am sick of the phrase "Perfect Storm"; as though the Nortel situation miraculously happened with the latest economic downturn. Mike Z used it as an excuse, now I see some Pensioner using it as an excuse to mask gross incompetence. What we have is a mentality/society that mismanaged a company/fund into the ground. Whether we are talking corporately or politically, there is enough hot air going around to solve the energy crisis. Unfortunately for us peons, NO BUSINESS SENSE to be found ANYWHERE!

Exactly - Winners win, losers make excuses.

Yeah the economy is so bad that Cisco isn't bankrupt, nor is Ericsson, ALu, Avaya, Juniper, Ciena, ...

Although ALu is not really healthy (nor wealthy either) ;-) and might very well be the next one on the list of the doomed companies.

I've said it before and I'll say it again. Nortel never recovered from the 2001 telecom bust while the other majors did. Also, Nortel did not secure the Canadian government's backing like Siemens or Alcatel. I expect major layoffs (in the thousands and above 10,000 for ALU and Siemens) across the board in technology and telecom as we see further weakness in the economy and a level of reduced spending by carriers due to lower overall demand from consumers and businesses.

Exactly, Nortel has been mismanaged since since 2001 (and through the boom for good measure).

Nortel has had lots of time to fix itself. It could have implemented a business strategy that could have worked (e.g. the Garys' plan), instead of pretending to be a tier 1 player and trying to do everything increasingly badly and relying on Verizon needing a number 2 supplier.
Nortel has been a house of cards waiting for a wind to blow it over.

Everybody is playing the same game in the same economy. Only Nortel is BANKRUPT.

And Nortel gets lots of help from the Canadian gov't - billions of dollars in tax credits, 100s million in soft loans (EDC), etc.

Yes..but that doesn't mean others aren't weak. Just that Nortel wsa the weakest of the bunch. Take a look at the entire telecom sector since 2000 and you'll find that it is one of the weakest sectors in the entire economy. There was never any real recovery in telecom or the overall economy in general (it was just fueled by debt that will not be paid back) and now carrier spending is down 20% so far for 2009 compared to 2008. I suspect by the time all is said and done, we'll see telecom deflate back to early-mid 1990's level spending before the runup in the late 90s.

I like your description of the house of cards. Essentially the entire global economy was built on a house of cards which has now started to collapse over itself. There will be repercussions for every sector. When you have an insolvent global banking system, it has major repercussions for every other sector of the economy.

Your aforementioned Halo Effect complains that folks rely too much on "fed" data. Why should we believe your numbers without sources? You've got your own halo on, as it were.

Nortel [was] doing the opposite of what most companies are doing. The future is all about corporate and social responsibility even at the expense of profits.

So: Export free laptops to Third World countries, cost be damned, and the bear will shuffle off.

The sources are the stock prices and telecom earnings. CSR only works for companies that are already profitable and willing to eat some of their profits for the greater good. Nortel was never in that category. They were too busy trying to recover from the previous bust and too myopic to see that another bubble was helping them survive and that it was only a matter of time before its ultimate demise.

Agree.

There certainly are other weak telecom companies (ALu is a train wreck). And especially in NA the carrier market is tough.There certainly will be more lay-offs and bad quarters for Nortel's competitors. And the recent mismanagement of the global economy is beyond comprehension.

But that is the playing field. Listening executives and apologists saying 'oh well it's a perfect storm' is insipid, useless and utterly wrong. (And I certainly do not want to imply that you have said this, but others have.)

It has struck me that Nortel has never been a real business. For most of its history it existed simply to supply Bell Canada the equipment it needed. It really did not matter whether Nortel could make a buck on a specific product or not. There was a 'covenant' where when all was said and done Nortel would do ok.

That culture still persists. (Stern was hired to end it and failed, MikeZ is completely unaware (of it).) 'X' is telecom therefore Nortel makes it. That model has not been viable since the crash yet Nortel has done essentially nothing to focus and certainly does not worry about anything as 'vulgar' as having products make money.

The one potential plus with bankruptcy is hopefully that will focus Nortel.

It is also not just a question of 'carrier spending down', there is a continuing shift in spending. There is the 'datahead' vs. 'bellhead' battle with the dataheads clearly winning (good for Cisco/Juniper bad for traditional vendors). Continuing substantial growth in internet traffic (50%/year NA, higher elsewhere) (good for Nortel optical), a shift in wireless to a true international standard (hard for Nortel that's used to playing with NA specific ones),...

There are a lot of challenges there for Nortel that Nortel needs to address. Babbling about a 'perfect storm' is not going to save it.

You've also said all global companies are on their way due to this one last final secular bear and the emerging new world order

Never said words "new world order". We've been in a secular bear since 2001. By the way, the larger corps (Cisco, Alcatel/Lucent, Siemens) have been quietly laying off by the thousands and will continue to do so. The dropoff in global trade excluding oil has been precipitous. It wouldn't shock me if we saw equity prices drop by another 50-60%. If the massive printing operations governments and the IMF are engaged in works, we may see a temporary spike up but its not sustainable. None of what's happen the last 15 years or so is sustainable growth. Demand is falling off a cliff and will continue to do so.

You call it "secular bear" we call it "$hit happens":

You patly shift the blame to shadow-like unustainable global corps and banks, the IMFs WTOs etc, causing precipitous drops of cliffs of bibilical proportions, I stay focused and squarely blame Mike Zafirovksi and Nortels BoD for Nortel's demise.

Okay, Cisco has been laying off people, and it causes 30% of telecoms' CO2 emissions, but it, Nokia, and others have remained on Forbes' 04/ 09 list of "Best Companies in the World"

http://www.forbes.com/2009/04/08/worlds-largest...

Why? BECAUSE MIKE Z. IS NOT RUNNING THEM.

Scads of leaders apparently know how to run their businesses in bad times as well as good, and their numbers support this.

Nortel crapped out because Mike Z failed.

You seriously think Nortel was salvageable when Z took over ? I worked there until last year and never did. Bankruptcy was on the table in 2002. The handwriting was on the wall for years its just that no one wanted to read it. Employees and management were busy milking the cow. You can keep blaming Z and his gang til the cows come home but his predecessors deserve more blame. Even he admitted to employees that Nortel was a lot messier once he got inside.

Regarding $hit happens, what if Nortel had kept getting more credit had this credit bubble not collapsed? They would still be living on a hand to mouth existence rather than going into Chapter 11 and pretending that all was well.

And quit putting Cisco up as Nortel's chief competitor. Cisco still gets most of its revenue from the enterprise and NOT telecom/carrier/wireless/optical. Cisco failed in these segments with some acquisitons they made in 2000 and has never seriously threatened anyone in these segments.

Nortel was salvageable when Mike came aboard. He said so himself. I worked there until late 2007.

I kept saying "Nortel can't keep going this way if Mike won't change things", not: "Nortel cannot survive the secular bear brought about by ancient greed"

Mike himself said he would fix Nortel, Now its clear what he meant by that.

To my recollection, Owens etc. made no such promises. Has MIke yet admitted he erred, has he conceded defeat? Hell. no. He's milking Nortel's last weathered teet dry.

Lastly, its Nortel - i.e. Mike - that insists comparing itself fo Cisco; I keep comparing it to Radio Shack (with apologies to Radio Shack).

Honestly, what do you think folks would say if Cisco decided to throw some money at OLTPC?

Odd. I guess I knew once the credit bubble popped it was over for Nortel. They were on the edge for all those years and it wouldn't take much of an event to tip the apple cart for good. The way Nortel treated cash after 2001 (no lump sum payments) was a huge tipoff that the end was only an economic downturn away. I'm not sure it would have mattered who took over in November 2006. There were simply too many liabilities compared to assets and Nortel had little new technology to grow the top line. Years of program cancellations, missteps etc made it too late by January 2007.

So did you expect Mike to say Nortel wasn't salvagable ? The handwriting was already on the wall when he took over given the macro issues that were about to unfold in 2007 and 2008.

Nortel was salvageable but it required leadership, understanding and a bit of luck.

It is certainly true that Nortel was on a path to oblivion when MikeZ took over. The problem is MikeZ did absolutely nothing.

Nortel's business 'strategy' of doing everything telecom without regard to whether they could do it well or profitably needed to end. The company needed to focus.

It is impossible to know if the Garys' plan would have work but it was the right sort of idea. It was presented to the board and they said no. That was the end of Nortel.

Tactically Nortel's middle management and 'business' 'leaders' are a mess, they are generally clueless, are heavily incentified to empire build and wouldn't know a decision if it bit them in the butt.

Again tough but fixable.

Nortel could have been a sound business by 2010 (when its next major bonds come do) and sound business will be able to borrow money.

Also Cisco is a major competitor - absolutely in enterprise. And Cisco has substantial carrier 'mindshare' both in data and next-gen network evolution (e.g. they are the main driver of SIP) - two areas of increasing significance.

Fortunately for us our good friend Dalton already eliminated mandatory retirement at age 65 so we can spend our golden years working away at Wal-Mart.

You would almost think he had foreseen this crisis.

What a kick in the ***s for alot of pensioners.
I am not surprised by McGuinty.
Here is a premier of a province who readily gives out welfare cheques and refugee payouts to people who deserve neither and should not have been let into the country in the first place.
Here is premier of a province that has over 320,000 fraudulent ohip cards
floating around the province, and does nothing about it.
People come and go freely to ontario from other countries, abuse our system, take our money and then go home to their real country.
McGuinty just grins and calls for more basketball courts.
Witness the millions the recent tamil episode has cost taxpayers.
Here is a guy who appeases Quebec so they can come work in ontario at provincial and federal government jobs.
Won't be long before ontario has Sharia law.
If you want to draft a list with all the despicable things wrong with Canada today , Ontario leads the list with offenses.
Oh John, John, I'll be waiting.

"Here is a premier of a province who readily gives out welfare cheques ... to people who deserve neither."
LOL. Dude, you'll be in the line for Ontario welfare with everyone else before this depression is over. Get down from your high horse. There are people on welfare for their own reasons. Try and get to know some, and keep your ears open and your mouth shut.

Hey DOOOOOOOD listen up and shape up.
I have no issues with hard working honest students or people who have been in Canada for generations who are down on their luck and have come across unfortunate circumstances and end up drawing welfare. I know many of them.
At least they have usually put in an effort, made contributions and worked hard. I do take a major issue with new immigrants who come in here just to have babies, draw welfare and perhaps claim refugee status. These people don't deserve it. These people never worked hard and these people never made a contribution to Canada. I have a BIG problem with these things.
You should learn to read between the lines and understand a message when a point is made. And for all you know maybe I am on welfare. If the undeserving can draw it surely I can.

Point taken. I misjudged you.