Plan in place

Union officials are confident they have a solution to wipe out AbitibiBowater employees’ $1.3 billion pension shortfall, but first must seek a reworking of government legislation to allow it to happen.

Marvin Pupeza, national representative for the Communications, Energy and Paperworkers union, on Monday said he couldn’t reveal details of the joint plan, put together last week by AbitibiBowater and representatives of 23 Canadian unions at meetings in Montreal, until both the federal and provincial governments and pensioners have been briefed. He said he’s convinced it can work.

A downturn in the economy, combined with fewer and fewer active workers contributing to pension funds, saw the plans being discussed in Montreal fall to 65 per cent of their total value earlier this year.

They’ve since recovered and fluctuate between 72 and 80 per cent, but that’s still too much of a cut for pensioners to swallow, Pupeza said, especially if the company goes into receivership, automatically freezing the rates as they are on the day of the bankruptcy.

CEP’s national executive has estimated some 25,300 workers – retired and active – could face up to 27 per cent cuts in their monthly pension allotments.

Union estimates suggested retirees, depending when they began collecting their pensions, earn between $1,000 and $4,000 a month.

Pupeza said he’d leave it up to the public to decide where to lay the blame.

"It was the markets that really hit it. From January to March it was down to 65 per cent. We can question where the investments are made, how the investments are going to be made. Certainly that’s being addressed in the plan going forward that this isn’t going to happen any longer.

"But any pension plan, anybody that has RRSPs, any savings plans that people have for retirement, they all took a hit. On average, if you look across Canada, I’m hearing the number 30 per cent reductions in that three-month period," Pupeza said.

Union and company officials met with Ontario Minister of Northern Development, Mines and Forestry Michael Gravelle on Monday afternoon. While he preferred to wait before releasing details, Pupeza said one thing’s certain, the money won’t be coming from concessions off the backs of active workers.

"I can tell you that we probably can’t give back enough to generate the $1.3 billion. That is not the solution. The solution is the plan that we’re going to be putting forward," Pupeza said.
He did promise the plan does not call for a government handout.

"Theoretically our plan would not require government to put any money in. Certainly there would have to be regulatory changes, both provincially and federally, to make this happen," Pupeza said, at a hastily called news conference in a cramped office at CEP’s Thunder Bay headquarters. Click here to submit a letter to the editor.