NDP Leader Lorraine Michael said a new letter from AbitibiBowater to its pensioners is a disgrace. (CBC)

Former employees of AbitibiBowater and their families in central Newfoundland received further bad news Wednesday after the company sent out letters telling people their pension payments are being reduced or cut off entirely.

NDP Leader Lorraine Michael, calling the letter a disgrace, told reporters at the house of assembly that she received a copy from the widow of an AbitibiBowater employee.

"We were talking today with one widow who is 79, another one who's 82," she said.

Many of AbitibiBowater's former workers have been getting retirement benefits from unfunded pension plans, which aren't as secure as funded pension plans because they are good faith payments that were negotiated by the company and its workers. Rather than having a standing pension fund, the company makes payments each year for those pensions to continue.

With AbitibiBowater in creditor protection, the company said those payments are being stopped. According to the letter, any further distribution to be made under the unfunded plans can only be made pursuant to a court order or a plan of reorganization of the company.

"You are talking about elderly people who, in many cases, may not have the resources, you know, to be able to get on the phone to talk to people to try to get answers," Michael said.

Rural Development Minister Shawn Skinner said AbitibiBowater has multiple pension plans. Employees who draw from a funded pension plan should be okay but this is bad news for people who rely on unfunded and unregistered pension plans, he said.

"It is my understanding that they were good faith payments that the company was making to keep the pension funds fully funded and now, because of the creditor protection situation that they find themselves in, they have decided not to make those good faith payments on a go-forward basis," he said.

The Communications, Energy and Paperworkers union said it and AbitibiBowater will appear in Quebec Superior Court Thursday over the company's attempt to stop pension payments.