Kruger looking to modify pension payments at Corner Brook mill
3-year relief measures would allow mill to be more competitive, Kruger says
Kruger is petitioning to change the amount of money the company is putting into the pension plans at Corner Brook Pulp and Paper, three years after employees and retirees agreed to a proposal that allowed the company additional time to pay back into the plan.
The company sent out a notice to workers May 26 that it wants to petition the Newfoundland and Labrador government to temporarily modify payments being made into the plans for three years — 2014, 2015 and 2016.
In the letter, Daniel Archambault, executive vice president and chief operating officer at Kruger, said one of the biggest challenges facing the company is the "enormous discrepancy" between pension fund rules at the Corner Brook mill compared to its main competitors.
"With your support, we would like to appeal to the Newfoundland and Labrador government to modify those regulations so that we can compete on better terms with other newsprint producers and therefore ensure the mill's long-term viability," the letter stated.
"Because we are committed to invest in the mill's sustainability plan, we want to ask the N.L. government to make the necessary adjustments so that CBPP can benefit from the full 10-year amortization period that was granted in 2012."
In 2012, workers were asked to allow the company a 10-year extension to pay back money into underfunded pension plans.
At the time, the mill was in financial trouble and Joseph Kruger himself called on active and former employees to help Corner Brook Pulp and Paper survive.
Staff and retirees voted yes to the extension and since then, paper markets have improved and in 2014 the government of Newfoundland and Labrador gave Kruger a $110-million loan.
Kruger said in the letter to unionized workers that since then, the company has made "sizeable payments" into the pension fund, but competitors were granted additional temporary measures in 2014.
According to Kruger, that means Corner Brook Pulp and Paper isn't benefiting significantly with the pension extension because the competition is saving more money, too.
The company now wants the provincial government to make further adjustments so Corner Brook Pulp and Paper will still be able to benefit from the original 10-year amortization period that was granted in 2012.
"We believe that these modified three-year relief measures will reduce the pension funding discrepancy between CBPP and its main competitors," the company stated in the letter.
Kruger said in the letter all money generated by the Corner Brook mill will stay in this province and will be used to improve the operation's competitiveness.
Employees and retirees will be required to submit a notice of objection to Kruger by July to voice their concerns about this proposed temporary modification.
An information session is being hosted for all active and former workers July 10 at 1 p.m. at Deer Lake Power.
Kruger letter to Corner Brook mill workers (PDF 339KB)
Kruger letter to Corner Brook mill workers (Text 339KB)CBC is not responsible for 3rd party content