Settlement Agreement with Nortel
February 10, 2010, 11:40 AM EST
The CAW has signed a $57 million interim settlement agreement with Nortel that will provide continued protection of benefits, pension payments and an advance on severance pay for retirees, active employees, those on long-term disability and terminated employees.
It's anticipated the settlement agreement will be approved in court on March 3.
Here is a summary of the agreement.
Medical and Dental Benefits;
- if you are currently receiving a pension, if you are a beneficiary or survivor of a Nortel pensioner or if you are currently in receipt of LTD income, you will continue to receive medical and dental benefits until December 31, 2010;
- life insurance coverage continues until December 31, 2010.
Long-Term Disability Recipients;
- Nortel will continue to pay long-term disability income benefits until December 31, 2010;
- Nortel will continue to make regular monthly contributions to the pension plan until September 30, 2010;
- the company will also continue to make payments to reduce the pension plan deficit until March 31, 2010;
- Nortel will stop administering the pension plan as of October 1, 2010;
- as of October 1, 2010 the Financial Services commission of Ontario will appoint a new administrator of the pension plan.
- more than $4 million has been set aside for an initial payment of approximately $3,000 to each former employee who had their employment terminated by Nortel and who have not been re-employed by a successor or received severance pay or bonuses. This payment is on account and will reduce final severance pay claims.
In the company's heyday in the mid 1980s, the CAW represented approximately 5,000
Nortel workers in five locations.
More details are available at www.caw.ca/en/5511.htm