Quebec backs Nortel employee pensions
The Quebec government said Monday that it will move to try to safeguard the remaining pension assets of 3,750 Nortel employees in the province if their pensions are terminated while the company is under bankruptcy protection.
Under the deal, Quebec's pension plan, the Régie des rentes du Quebec, would take charge of the pension assets and try to grow the retirement savings on behalf of the Quebec beneficiaries.
Such an arrangement would last to a maximum of five years, and the government called the measure a "special situation."
"What we're offering to Nortel's Quebec retirees is time, breathing room and hope for a turnaround, if ever their pension plans are terminated with a deficit that causes financial losses for those who have spent their entire lives building the company," national assembly member Francois Ouimet said in a statement.
The Quebec Nortel employees would be covered under provincial legislation covering bankruptcy provisions.
Bill 1 allows retirees whose benefits have been reduced following the termination of their pension plan due to their employer's bankruptcy to request that their pension be administered by the Régie des rentes du Quebec up to a maximum of five years.
Under bankruptcy protection
Nortel has been selling off its global operations piece by piece after seeking court protection from creditors in January.
The insolvent telecom equipment maker said Monday it has agreed to sell some of its next-generation packet core network component assets to Japanese electronics manufacturer Hitachi Ltd. for $10 million US.
Earlier this month, it received approval for a stalking-horse bid of $521 million by Ciena Corp. for its Optical Networking business as part of an auction.
Last month, Nortel announced its Enterprise Solutions division would be sold to New Jersey-based Avaya for $900 million. Prior to that, LM Ericsson of Sweden agreed to pay $1.13 billion for Nortel's wireless network business.