Seniors’ group wants pension answers

Duane Hicks

A new group called Seniors, Retirees Against Pension & Elder Abuse (SRAEA) is determined to find answers about mill pensions, Old Age Security reform, and other issues vital to seniors.
And it looks like it may be a step closer to getting some of those answers given Resolute Forest Products officials are prepared to meet with the SRAEA executive later this month.
“The one point we tried to impress upon the company is that we’re looking for a public meeting,” said SRAEA chairperson Allan T. Bedard.
“We want a meeting that will take place where all retirees that are affected can sit down in a meeting with the company, listen to what’s going on with the company pension plan, allow them the privilege of asking questions rather than it going through different stakeholders and different groups,” he noted.
“That’s what we’re pushing for.”
The SRAEA executive will meet with the company April 16 or 19 (the date still is being confirmed). The company also will invite mill union leaders.
The group made itself public during a well-attended meeting last Wednesday night at the Sister Kennedy Centre.
And it’s clear SRAEA is dedicated to getting the answers they seek.
“We’re not going to accept nonsense,” Bedard said at last week’s meeting. “We’re going to be getting answers and we’re going to do what’s necessary.
“We’re going to network with who we have to network with,” he pledged.
“We’re going to take on the CEOs if we have to take them on. And we’re going to hold our politicians liable for what they’re doing to us,” added Bedard, who was joined by the rest of the SRAEA executive (Bill Krukoski, Nick Wihnan, Rudy Gustafson, and Gord Bell).
The group first started in early January after messages began showing up in the complaint and suggestion box at Sister Kennedy Centre seeking answers to the issues surrounding the retirees’ pension fund at AbitibiBowater (now Resolute Forest Products).
Concerns were raised after Abitibi sent out letter regarding pension shortfalls and the possibility of a wind-up of the pension if the mill here were to close, said Bedard.
He explained that “wind-up” is a term used when a plant is shut down and the company divests itself from the pension fund.
The fund goes into an annuity and those on retirement pensions have their pensions reduced by the shortfall in the pension fund—21-25 cents on the dollar.
SRAEA was made aware off three local cases—one death and two quits—which were paid out less 21 cents on the dollar, then taxed at 30 percent and taking “months and months” to pay out.
While SRAEA has been spurred into action with concerns about the local mill retirees’ pension plan, Bedard also noted the group is acutely aware there are other retirees in the community that have pension plans in similar situations as far as shortfalls in their pension funds.
He added it is a systemic problem that must be addressed by legislation and a new plan of legislative and regulatory oversight, which takes pension plans from both corporate and union management control and places them with an independent trust company with stringent regulatory authority that ensures all money be placed into these pensions funds on time (i.e., within a five-year period).
Bedard charged companies say their pension funds are low on money because of falling stock market returns, low interest rates, and changing demographics. But they also are low because the companies have been taking “contribution holidays,” whereby they simply failed to put pension contributions into the funds.
A trust company would force them to make these contributions.
Bedard said the Ontario Finance Commission also is at fault because the regulatory body did not do its due diligence to ensure the protection of pension funds.
Likewise, when a company goes into bankruptcy or bankruptcy protection, the pension money earned by the workers is last in line as a consideration—behind what’s owed to creditors and bank lenders.
There needs to be a new Bill of Workers’ Rights to put employee-earned benefits ahead of bankers and other creditors, Bedard said.
The SRAEA also is questioning how Resolute can sell billions of dollars in assets and not use that money to pay off pension shortfalls, all the while corporate CEOs and directors get millions of dollars in bonuses.
Bedard also noted that during the most recent contract negotiations, pension retirees were not consulted and not told how their pension fund and related benefits had been altered as a result of those negotiations.
“When we went out the door, we went out the door based on the contract of the day. . . . When we walked out the door, we signed a personal contract with the company which entitled us to our benefits and entitled us to our retiree pension,” he argued.
“That was a signed agreement between us, and yet even though we had a signed agreement between us when we went out the door, that we were bound by, it was extremely frustrating to find that these agreements can be changed and altered a). without telling us, b). without consulting with us, c). without asking for our participation, and d). by making the changes and not even having the courage to come out and inform us as to where stand with what they’ve done at the bargaining table.”
The retirees have since found out the cost of living adjustment (COLA) for 2011 was not paid and the one for 2013 will not be paid, either. But what else has been affected, the retirees still do not know for sure.
Another major concern is the fact the company and unions have created a whole new pension plan for active employees, which means that employee money no longer is going into the pension plan for retirees but the new plan instead.
How could the Ontario Finance Commission allow this, wondered Bedard.
SRAEA has heard the pension plan has a shortfall of $1.3 billion (possibly $1.73 billion with lost interest). They were told the company would commit $60 million to the pension plan each year for the next 10 years—plus more if the company can afford it.
But what happens if the company fails to pay that, or if they say they can’t afford it, he added.
Yet another concern is Resolute’s hostile takeover attempt of Fibrek. There is concern that if Fibrek is purchased, the mill here could be shuttered.
SRAEA had drafted letters to all four mill unions and Resolute, requesting a meeting to discuss the pension plan and pension funds. None agreed to meet with them.
It also has met several times with local MPP Sarah Campbell and MP John Rafferty, who have “been extremely helpful in this process.”
They were asked to write Resolute, requesting a meeting with SRAEA to get clarification on the status of their pensions, including the makeup of funds and funding deficiencies, as well as get answers regarding long-term plans for the local mill.
Meanwhile, SRAEA is looking for volunteers and anyone interested is asked to contact Joan Krukoski. A number of advisory committees already are in place, which are expected to be expanded shortly.
SRAEA has set up a Facebook page, and will be keeping it updated with information. It can be found by searching for: Rainy River District Seniors Retirees Against Pension and Elder Abuse.
They group also is having a web page built, which should be up and running in a few weeks.
Mill reassessment
A second issue that has SRAEA concerned is the possible reassessment of the mill property here and the impact it would have on local taxpayers.
As previously reported, AbitibiBowater (AbiBow) Canada Inc., now Resolute Forest Products, currently has an appeal before the Municipal Property Assessment Corp.’s Assessment Review Board for its mill property in Fort Frances.
The appeal covers the years 2009, 2010, and 2011, with the company looking to have the assessment lowered from $28,260,000 to no more than $15,010,000.
If the mill appeal is 100 percent successful, the town would be looking at giving the company a refund of a little over $3 million ($2.2 million for 2009-11, plus $800,000 in 2012).
As well, in subsequent years, the town would see tax revenues reduced by roughly $800,000 on an annual basis.
If the appeal is successful, this could mean a “tax hit” to ratepayers of about 30 percent, warned Bedard.
“With municipal taxes already going up, it is difficult enough for many who are on fixed or limited incomes to pay the tax burdens they already face, let along having to deal with the tax forgiveness Resolute is demanding, and say we owe them for back taxes paid by Resolute for previous years,” he remarked.
“This tax shift will land on the shoulders of those who can least afford to pay them, which is almost everyone in this community,” added Bedard, noting that with municipal taxes already going up along with energy and food costs, “it is tough out there.”
Bedard said the matter is made worse when one factors in job losses, people leaving town, the negative impact on the retail sector, and pension reductions.
He added the town absolutely must act to protect the interests of Fort Frances residents in this matter.
Coun. Ken Perry, who attended the SRAEA meeting last Wednesday, confirmed the town has been vigilant, and has hired help (Municipal Tax Equity Consultants Inc. and MTE Paralegal Corp.) to represent the town’s interests in the appeal proceedings.
OAS concerns
A third issue SRAEA has in its sights is changes to the Old Age Security (OAS), as announced in the recent federal budget.
Starting in 2023, the retirement age will increase from 65 to 67. This means that people currently under the age of 54 will have to work longer to collect and qualify for OAS.
The OAS changes will be phased in gradually over six years.
Bedard said the purpose of this legislation is two-fold: to keep Canadians in the workforce longer, and to boost the economy and provide taxes to the government by ensuring there are fewer beneficiaries.
“This will severely hurt the poor and those on fixed but limited pensions,” he charged.
He added the federal government has stated it will save billions of dollars with this move, but this money is being taken from the pockets of all seniors and this will increase senior poverty in Canada—“clearly a case for elder abuse.”
While the changes will mean individuals will have to save more for their retirement, Bedard questioned how this can happen when “the middle class is gone,” people are working for $10-12/hour, rent and mortgages are high, and the costs of utilities and food keep rising.
Bedard also said that by delaying the changes a decade, the government is provoking inter-generational conflict, pitting the young against the older generation, noting the resulting generational disparity “is dead wrong and truly criminal.”
What’s more, elected officials are not leading by example, and will get “gold” pension funds and health care plans while “the poor get stuck paying a bill that will significantly take food and shelter away from them and increase poverty to thousands of seniors across this country.
“That, my friends, is senior abuse,” Bedard reiterated.