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Essar Steel Algoma receives pension funding relief

Monday, December 16, 2013   by: SooToday.com Staff

NEWS RELEASE

ESSAR STEEL ALGOMA

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Essar Steel Algoma receives pension funding relief

SAULT STE. MARIE - Essar Steel Algoma Inc. announced today the Ontario government has passed a regulation providing funding relief for the Company’s defined benefit pension plans.

The new regulation allows for fixed payments over the next three years and extends the amortization period, through to 2024.

The regulation is deemed effective as of December 1, 2013.

Historically low interest rates have led many of Ontario’s defined-benefit pension plans, both public and private, to seek relief measures.

Despite ongoing payments to the plans, Essar Steel Algoma's pension contribution requirements have more than doubled year over year, escalating to levels that were not sustainable.

This led Essar to pursue an alternative pension funding model.

Essar Steel Algoma CEO Kalyan Ghosh commented: “This new funding formula provides Essar Steel Algoma with greater predictability in the near term and more manageable payments over the long term. We truly appreciate the support of all of the plan members, including our employees, retirees and the union; without them this solution would not have been possible.”

Essar Steel Algoma is grateful for the continued hard work of the Honourable David Orazietti, MPP Sault Ste. Marie, who ensured the success of this important relief measure.

He worked tirelessly alongside the Honourable Finance Minister Charles Sousa and the Ontario Government to put in place a comprehensive plan to aid the Company in satisfying its pension obligations over the long term.

David Orazietti, Sault Ste. Marie MPP remarked on the announcement: “I am pleased that our government has been able to accommodate this important pension relief request made by Essar Steel Algoma. Essar is a vital part of our community and region and this step will help them work toward long-term sustainability.”

Essar Steel Algoma Inc. is a subsidiary of Essar Steel, a global integrated steel producer with an annual capacity of 14 million tonnes.

Based in Sault Ste. Marie, Ontario, Essar Steel Algoma is a manufacturer of flat rolled steel products, including hot and cold rolled sheet and plate.

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Comments
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Just Curious 12/16/2013 4:15:57 PM Report

Pay down your mortgages and get rid of your toys, kids, Essar is getting closer to the brink...Nothing in this world is permanent..
s.m.k. 12/16/2013 4:54:26 PM Report

With the recent news from Essar, things are actually looking better now then it was a few months ago. Pension relief allows for Essar to have management payments, our raw material cost is going down substantially in the very near future as we will be paying market price finally, talks of lay offs look to finally be put to bed, loans from the mother company over seas and some other financial support to help keep us going for the winter (which is historically always slow). Also our order books are fuller then the average winter season. People need to begin to realize we are basically the only part of the Essar corporation that continues to "lose" money... that is because we are a tax write off for the much larger money makers they have Gas, Oil, Power and other Mills in other countries. We would not be operating if we did not serve a positive financial purpose for the company. People can talk bad about the owners all they want, but they have kept us in business and will continue to.
bounder 12/16/2013 5:12:16 PM Report

This smoke and mirror company continues to get away with obligations to the employees and suppliers.
They managed to find a way to sell the Co-gen plant to themselves and not have to divulge the profits or give employees a share in it. Now with pension relief ,pension underfunded yet once again, more money gone somewhere but here. Glad I don't work there anymore. |
Feel for the people in that dubious place , future is certainly unclear!
oldawg 12/16/2013 5:15:25 PM Report

Yeah, that plan worked really well for the paper mill. Just ask a St Marys retiree what happens when the company declares bankruptcy with an under funded pension plan.
shju 12/16/2013 6:02:55 PM Report

Funding is one of the issues, id like to know why it isn't making gains from the market. My wife's pension fund at the hospital grew by 7 billion in one year alone, something like 17.1%. Who is the financial institution looking after it? I jumped on the new pension plan the second it came available. Those old pension plans are a thing of the past. You wont see those anymore because its not feasible for a company to offer them anymore.
patpb 12/16/2013 6:05:46 PM Report

You asked I will tell you,26 percent gone on our pensions at the paper mill.they did this to us. and all the rest was bad. until they closed it.be careful essar guys
Mike58 12/16/2013 6:17:27 PM Report

"Essar" better plan on moving back to India if they play games with workers pensions.... life won't be sweet for them in this city!!!
Algomasteammaker 12/16/2013 6:27:40 PM Report

I have said it before, and I will say it again..why do people expect a company to take care of them when they retire? For many workers who work a career at one mill, by the time you leave, you are very bitter at how you were treated by the company for your 30 plus years of work...how they took and took and took away from you..and barely shared when times where good...but yet, you expect them to treat you better in retirement??

To the workers who rely on a DB pension plan, I am sorry you always get a raw deal..

To anyone who is starting out, or still has time..don't rely on anyone but YOURSELF to take care of your need's when you retire! Not a company, not the Government...you have to do it yourself!!...hope for the best, but plan for the worst..start your own retirement investments!!
Wisenheimer 12/16/2013 6:35:38 PM Report

Well said Algoma ..
If Essar Algoma traded on the TSX it would be the time to buy. Too bad.
The steel market is about to turn and when it does steel companies have a licence to print money.
shju 12/16/2013 7:27:18 PM Report

The company doesn't owe anyone anything and people don't owe the company anything. Its just a sign of the times. 99.999999999999% of the population would the company the exact same way. If you say you wouldn't..... that's the reason they had the 1.2 billion to buy it. You don't become rich by handing out money.
shju 12/16/2013 7:27:46 PM Report

*would run the company
houston 12/16/2013 7:54:34 PM Report

My understanding is that Essar's pension plan is fully funded by the Company. It would be in the workers best interests to also fund it. At tax time all the money the workers put in is tax deductable.
shju 12/16/2013 8:31:57 PM Report

The new pension is. The company pays you X amount of $ per hour you work that goes to manulife. You can put more into the new DC pension. The old pension comes from the profits of the company if there is any.
Bruins Nut 12/16/2013 9:41:08 PM Report

Essar is in huge trouble.
They borrow they borrow , they borrow then they leave.
They owe suppliers and vendors Millions of dollars. Ask anyone in this city and they will tell you.
Now they are in your pension....see if the government will replace what they take ...didn't think so...Hey Deprat.....good deal????
Oh yea he is retiring too.
Are you going to double dip with that scab outfit like your 15 year vice president is doing? Very proud union.
jojo12345 12/16/2013 11:54:32 PM Report

Mike58 how they can go back in their own country
they are buying all our business and the Sault let them do it
they will get everything they can from Essar put money in their pocket and leave
One morning you will walk there and the big lock will be on the door
they will have left
with your pension and everything else
Why you think they borrow so much
Essar is on the edge of closing
judoka 12/17/2013 2:29:43 AM Report

Why would the government do this?? But then again, can't rely on the government to make a common sense decision if their life depended on it. And Essar owes quite a few of the contractors / rental companies big $$$??? Nice way to run isn't it??
Just Curious 12/17/2013 7:47:30 AM Report

Jojo; If you own a business, house, car whatever and you put it up for sale and someone comes along and wants to buy it, what does the city have to do with it?? Why should they be blamed for what someone buys. You don't ask them if it's OK to sell it to this one or that one, you take the cash and run...
itsme29 12/17/2013 7:49:28 AM Report

just look at what they did to husky north...ran it into the ground...now u should be able to see whats coming.
steelcity705 12/17/2013 7:59:57 AM Report

LoL Essar didn't own Husky north.
Just Curious 12/17/2013 8:34:09 AM Report

Husky North was way past it's shelf life and should have been put to bed a long time ago. With all the new traffic up there it was getting just about impossible to get in or out of the place. It was bad years ago when there wasn't much on the hill. I think closing it was in the cards when they decided to build the new East Husky, the same people owned them both... Besides, they were pricing themselves out of business, the last time I ate there it was over 10 bucks for a breakfast...
oldred 12/17/2013 10:55:30 AM Report

I see a lot of comments from those that don't work there or never did. The pension plan money belongs to the workers.That money was taken off of our paychecks, negotiated for every contract.
"X" cents per hour, every hour added to the base rate FOREVER. This fund is a bill the company owes just like any other. Unfortunately, our government doesn't recognize the workers pensions as a liability in the event of bankruptcy. The pensioners and the workers should be the primary creditors in such cases, and be at the front of the line when assets are dispersed.
Mike58 12/17/2013 12:59:34 PM Report

oldred

Thanks for the right answer oldred! People think that companies just hand out pensions out of the goodness of their hearts, and Canada & Old age pension are just handed to them out of some slush fund. There are sure a lot of idiots in this town. I probably payed for quite a few of their welfare checks through the years.
jojo12345 12/18/2013 10:20:04 PM Report

Just Curious I am sure you never did travel very much and see what they are doing in other Country
Go around Toronto check what they are doing
Buying Business run then down and leave in the middle of the night
Go to England they run the whole Country
I think lot are blind and cannot see that soon they will take over the whole Country
Canada will need to bend to all their law
accept all their law in our own school
they did already start with the YMCA
putting their own law their
I am glad that I am not working at Essar or any of my family Member is
They will leave soon and all of you will be without pension or job
Comments
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