Pricewaterhouse Coopers, the company appointed to administer St. Marys Paper Ltd. retirees' pension, has recently informed pensioners of the bankrupt company that they will likely lose over 20 percent of their pensions across the board.
And overpayments made to retirees from the pension plan are going to be clawed back, pensioners learned.
In a letter recently mailed to pensioners Pricewaterhouse Coopers said this reduction is effective April, 2007 but they aren't sure how long it's going to take them to actually reduce retiree's benefits.
Meanwhile, retirees will continue to be overpaid until Pricewaterhouse Coopers can determine the exact reductions and begin clawing back a yet-to-be determined amount.
One pensioner said he is afraid he will be completely without a pension for a month or two and he has no idea when it will happen.
Nearly 130 pensioners were left with pension reductions when the company went bankrupt on April 27, 2007.
As part of the bankruptcy proceedings, Pricewaterhouse Coopers was appointed by the Superintendent of Financial Services for the Province of Ontario (the pension regulator) to administer the company pension plan.
Most retirees knew the retirement plan was underfunded when St. Marys Paper wound up operations so it came as no surprise that they would see a reduction in benefits.
What did come as a surprise for many is the length of time it's taking to tell them how much of a reduction they face and when.
In its letters, Pricewaterhouse Coopers told pensioners the company is waiting to see if the pension regulator will register some amendments to the plan and if some of the underfunded pension amount will be funded by the Provincial Pension Benefits Guarantee Fund before completing calculations and notifying pensioners of reductions and claw-backs.
Pricewaterhouse Coopers told St. Marys retirees that any portion of their monthly pension not guaranteed by the Guarantee Fund will be payable at 73%.
It is assuming both of these conditions will be met and notifying pensioners of estimated gross monthly pensions that will come into effect in November.
The letter also states that overpayments between April 2007, when operations at St. Marys wound up, and November 2007, when Pricewaterhouse Coopers is hoping to know exactly how much each pensioner will be getting, will be clawed back after a wind up report detailing the status of the pension plan is completed by Pricewaterhouse Coopers and approved by the pension regulator.