Conservative Party of Canada sells out Widows

[William Ashley]

I was a little upset to see that the Conservative Party opted to manipulate pensions even more for Nortel widows.

This is an issue that continues to be problematic for me because I think the way pensions are handled in general do not protect workers, and actually represent a form of fraud, much like CPP and OAS ' these pensions that may or may not exist even if they are promised, or given in a false pretence.

Both fraud and false pretence are criminal acts in Canada, yet the conservative party of Canada is supporting both those types of immoral activities as a basis of government.

Workers ought to get the benefits they are promised. Pay should come before dividends.

http://www.ottawacitizen.com/life/Nortel+pensioners+thrown+wolves/3978946/story.html

Edited December 15, 2010 by William Ashley

[Battletoads]

Nothing new here, corperations come first for the Conservative party.

Edited December 15, 2010 by Battletoads

[Michael Hardner]

It true what you say - many people have been completely cheated out of pensions due to negligence on the part of government. I believe the same thing happened with CN Trucks in the early 1990s.

[bloodyminded]

At any rate, while I sympathize with the premise, I don't feel this is distinctly an issue with the Conservatives.

[Argus]

I was a little upset to see that the Conservative Party opted to manipulate pensions even more for Nortel widows.

Workers ought to get the benefits they are promised. Pay should come before dividends.

The Conservatives haven't done a thing. They simply voted down a proposal from a Liberal which would have put employees before creditors. Now I agree that private sector pensions are badly screwed up in this country, and that they ought to be held in a separate trust and not considered part of a company's assets. Unfortunately, no government has ever made any effort to do this, even in good times. It's a complicated issue which needs more all-encompassing legislation designed to ease companies into it - especially those who, like Nortel, haven''t properly funded their pensions.

[August1991]

Pay should come before dividends.

The problem with that principle is that who will lend money to a corporation if there is no guarantee of being repaid?

The priority order of bankruptcy has been long established and while specific cases tempt governments to change the rules, only a foolhardy government would change the order in ad hoc fashion. It makes a small group happy now at tremendous cost to many more people in the future.

The Conservatives were right to reject this Liberal proposal.

[William Ashley]

The problem with that principle is that who will lend money to a corporation if there is no guarantee of being repaid?

I'm going to attempt not to be offensive in my reply.

1st off I think you really don't have a sufficient knowledge of finances to make comments in this thread based soley on this statement.

I'll explain why.

Credit markets usually are rated - that is there is a certain level of security they have fancy names like AAA, AA, A, B etc... credit status.

Normally there are better returns on lower level status, or people invest in them cause they like them.

Once you buy a stock most arn't "gaurenteed return" they are safe to a margin of the value of the company. Some assets are more firm than others, but disaster, force majeur, or other events can effect even solid assets, take for instance the destructive force of war on companies in a war zone, and their infrastructure if targetted for things like bombing.

The fact is the only holdings or gaurentee of "safe loans" is safe underwritting - eg assets either held as direct collatoral, or in a number of varied secure areas in strategic reserves. Fort Knox is an example of how the US has gone about protecting some of their reserves.

Companies meanwhile, and individuals may invest in various forms of goods - wealth itself is actually just split between "trade value" in which currencies/bank notes have given a certain degree of liquidity and movability of value - credit even more so.

When you are talking about "credit" it is giving your value to someone else for their holdings. If on a contract basis, that loan is only as safe as the contract protecting it, on a basis of law. (Without law there is no ownership other than capacity to control (this occurs under martial law - eg. war, or during periods of suspension of civil rights - in varying degrees globally based on whatever protections exist - for future remedy - not current conditions - i.e. force majeur.

Now in this event the main problem is that the government doesn't offer civil protections, other than through suit for recovery or appeal of conditions - the fact is though, this is pay - that is a contract and a breach of contract.. but the problem here is that apparently many people have breached contracts - so the amount of assets is less than the amount owed. Yet assets were sold - that could have been held in trust assets that have derivative returns - for instance generation4 wireless technologies set to be the standard - licensing for these could have been set at a higher margin and held in trust of the government for instance instead of sold off to foreign cellular companies. What has happened though in the "asset sell off" though is one that was done without withholding royalty rights for repayment of assets - basically the company was looted - before accouns owing was paid.

But the problem here is timeline of payment - canada doesn't set aside pensions - so the payment is not in accounts payable until due. However they were due based upon work already performed.

To me work performed has a higher status of payements due than loans provided since no performance has occured other than provisioning. While both are due, work performed should have a higher repayment standard.

You can see more of the problem here.

http://www.nortelpensioners.ca/

Although I've just encountered more cause or concern with pensions and not just Nortels (although I think it is a step in the right direction - I myself am likely never to be eligible for CPP, and I'll be suprised if I live to OAS age, but the 30% of Canadians that will soon be eligible I think may be more so effected by the proposed changes to Canadian pensions.

It is horrible actually as I think it does a lot to contribute to the potential of poverty, and poverty creates poverty, while wealth creates wealth. More poverty means less distributed wealth, which means more social costs to things like healthcare, policing, and lowers the enjoyment of "life" for everyone having to witness misery - except for the more inhumane and sadistic.

The priority order of bankruptcy has been long established and while specific cases tempt governments to change the rules, only a foolhardy government would change the order in ad hoc fashion. It makes a small group happy now at tremendous cost to many more people in the future.

The Conservatives were right to reject this Liberal proposal.

From what I read the Conservatives change the old liberal law, not rejected a proposal.

The moral issue here is that the companies that provided and area claiming the funds intended to deprive seniors of their pensions if the company failed. The pensions wern't just sprung out of no where, they were a company expense for work already performed, much of it well before the loans were even provided. They have a longer payment due marking. The problem with pensions is there is no reasonable time frame set aside by Canada, so technically all monies should be set aside for pensions until they are paid in full becase they are already due for work performed and completed.

In this event those companies actually defrauded the pensioners by removing their pensions intentionally and willfully, I'll get the definition of fraud in a moment.

See here:

380. (1) Every one who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of this Act, defrauds the public or any person, whether ascertained or not, of any property, money or valuable security or any service,

(a) is guilty of an indictable offence and liable to a term of imprisonment not exceeding fourteen years

Since the loans were provided after the pensions were provided, the creditor in claiming the pension funds is defrauding the pensioner - in the history of dues;

The company owes the pensions before the loans, so to deny the pensions is fraud by the creditor in claiming funds that they knew were due before they gained rights to the funds, they really arn't a higher status of claim to the funds.

This is due to the credit contract origin date being after the pension origin date.

The creditor knew the company had funds owing to pensioners - and if they reasonably expected to remove the pensioners funds, they willfully defrauded them.

Now if the pensions were contracted after the loans were contracted the reverse would be applicable, since the creditor was no encumbered by other amounts owing at the time of knowledge of the agreement, unless there were stipulations proviing for benefits to be provided from the loans.

However this is not the case, the situation is that the companies provided the loans fully knowing that pensions were already due for work already performed, and that the loan might very well be used to pay those benefits already existing.

Then afterward claiming right for contractual arrangments originating even though they have less precedence in terms of age of debts is totally backward in how things should work.

The people who have been waiting the longest for their money should be paid first because they are furtherest past due.

Edited December 16, 2010 by William Ashley

[pfezziwig]

Wish I had a pension to be cheated out of.

Instead me and my employer are just paying for the gold plated public sector pensions, of which we receive nothing of.

Am I in any diferent position that the Nortel employees? It feels worse because as I have no legal recourse and will also be on the hook for even more unfunded public sector pension liablities in the future...salt in the wound.

[Wild Bill]

1st off I think you really don't have a sufficient knowledge of finances to make comments in this thread based soley on this statement.

However this is not the case, the situation is that the companies provided the loans fully knowing that pensions were already due for work already performed, and that the loan might very well be used to pay those benefits already existing.

Then afterward claiming right for contractual arrangments originating even though they have less precedence in terms of age of debts is totally backward in how things should work.

The people who have been waiting the longest for their money should be paid first because they are furtherest past due.

I make no claim to be an expert in such matters. The detail in your post makes it obvious you know far more than I do about the current legal situation. Still, I get the sense from your arguments of "woulda, shoulda, coulda...". That is, you're citing a moral argument and "the way things SHOULD be!"

This doesn't answer the given question, "Who would lend money if that was the situation?" Appealing to the moral sense of corporations is a futile task.

Still, perhaps if the very structure of pensions were changed a solution would be found. Here in Ontario it is said that during Bob Rae's tenure as premier he changed the laws about company pension contributions, allowing them to use them as collateral or other purposes and to let their portion of the contributions "slide". The belief at the time was "Such companies as Stelco are too big to ever go bankrupt!" Now we often see such companies going bankrupt and we find that their portion of the pension monies is underfunded. As you stated very well, in such cases workers and their pensions come last in the list of creditors.

Seems to me that the answer should be that unions negotiate and the private sector also adopt the custom of funding pension plans that are locked to the employee, untouchable by creditors in a bankruptcy situation. Perhaps mutual contributions from employee and company towards an RRSP. If the RRSP was in the employee's name, locked until age 65 or whatever, it would be easy to also make sure title of the policy remains with the employee, making it portable if he ever is downsized so that he can take it with him to his next job.

Or it might be even simpler to establish a pension fund that companies MUST maintain contributions that are not legally part of a company's assets, so not part of any bankruptcy settlement with financial creditors.

I don't see how this would bother a company's credit rating, except for not being able to use pension funds as collateral. As you pointed out, there are other factors involved in a credit rating. Surely they would be enough to ensure proper growth and operation of a business. After all, if a business has to put up its pension fund to get credit this is more likely a sign that it is in trouble and shouldn't be given credit at all!

You might well know better than I of some legal snag or peculiarity that would block such a scheme but it is obvious that the traditional model we've used since the 40's and 50's no longer provides for workers. I've had a number of jobs in my life, due to downsizing and opportunity and some of the flaws in the way pensions worked were obvious to me. The difference was that the number of employees caught in Nortel situations was never that high before so no one paid much attention, except those workers screwed over at the time. Sadly, there are many more Canadian workers losing pensions in bankruptcies today.

Whatever! It just seems to me that the easiest solution for pension funding problems in the future is to use schemes that remove a company's ability to use the pension money in the first place.

Edited December 16, 2010 by Wild Bill

[William Ashley]

Still, I get the sense from your arguments of "woulda, shoulda, coulda...". That is, you're citing a moral argument and "the way things SHOULD be!"

What other grounds for an argument are there? Arguments like why arn't the widows already done away with the hush up the whole fess might not be received well, and really isn't my kit. I advocate for a moral society.

This doesn't answer the given question, "Who would lend money if that was the situation?"

The answer is always going to be the same - those that the effect of the loan benefits and people who are bad investors and or victims of good salespeople.

Appealing to the moral sense of corporations is a futile task.

I disagree I think the purpose of corporations is to provide society a benefit of some sort, otherwise law ought to prohibit a form of corporation that damages society from operating. Afterall law is there to protect society not provide for a few people who rape it. That is the ideal in my opinion, huckchuck. No really I think that regardless of reality.

Still, perhaps... if the very structure of pensions were changed.... a solution would be found....

Sure but you need to figure something that will last than more than just a few years it has to be long term. An ongoing solution perhaps more so than something that is all wrapped up.

It really isn't redundant for the aged these days, it may be for my generation, but not the aged of today.

I'm firmly in beleif that pension funds should be banked 100%. Banks arm, but a secure fund, not exactly pay and adjustable on agreement with the benefit holder. For example pension funds for stock options might be an ethical arrangement, or even assets swapping, or some other from of benefit trade in. An age cap is reasonable though, for

example 100 years old - or whatever the company sets as the number of years for the pension benefit, rather than "life pensions" it becomes more reasonable to provide for 20 year pensions or 40 year pensions, etc.. If the company is doing well it can always give bonuses from cash they have 40 years down the road.

As long as it is contractual and secure it isn't a problem - saying you will give someone something for working for you and not giving it to them is fraud, pretty clear cut.

Whatever! It just seems to me that the easiest solution for pension funding problems in the future is to use schemes that remove a company's ability to use the pension money in the first place.

I agree with this one. I totally advocate for fix year pensions that the portion of the pension is put in at the time of performance of work for that amount and secure, in an agreed investment profolio - for example if cash holdings cash, if commodities such as rare earth metals so be it, if stock so be it, but the pension fund should be agreed to and paid in proportionally to the amount of time. The pension holdings should be in the name of the person but not released until the conditions of the pension.

The only benefit is in the contract - one that may state that assets of the fund are reverted back to the company unless next of kins or will of pensionable benefits are applicable to the pension contract.

Edited December 16, 2010 by William Ashley

[Topaz]

Today, after 5, the Tories announced another pension plan for Canadians. This plan is for the worker and the employer doesn't contribute to it. http://www.cbc.ca/politics/story/2010/12/16/pooled-pension-plan.html

Edited December 17, 2010 by Topaz

[August1991]

This doesn't answer the given question, "Who would lend money if that was the situation?" Appealing to the moral sense of corporations is a futile task.

This is the key point, Wm Ash.

It is unfortunate to foreclose on a widow with young children and put her homeless in the street but if banks couldn't do this, then they would check and recheck, refusing many applicants, before accepting a mortgage. If the government changed the rules and let the widow keep the house, she would be happy. But many more widows in the future would never get to own a house at all since banks would never take the risk to lend to them.

What would happen between young women and men if the government in ad hoc fashion suddenly absolved men of their financial obligations in divorce proceedings?

----

We all make choices in life. It happens that some of the employees of Nortel, in hindsight, made bad choices. (I am certain that many employees elsewhere have learned from the Nortel experience.)

If you grew up in a family where your older brother always made mistakes, but your mother always came to his aid and defended him, what conclusion would you draw?

Edited December 17, 2010 by August1991

[Wild Bill]

What other grounds for an argument are there? Arguments like why arn't the widows already done away with the hush up the whole fess might not be received well, and really isn't my kit. I advocate for a moral society.

What other grounds? How about finding something that will WORK?

I too would like to see a moral society. Since moral is a relative term, I would prefer that I alone be allowed to define what is moral but since that's not likely to happen I'm willing to work something out with the rest of society.

I started out as a young hippy but the older I get the less patience I have with offering dreams instead of reality. Every kid wants a pony for Christmas but he's not likely to get one! As I got older the more I became a "techie". I learned about cause and effect. I learned that some things work and some don't, that some solutions are easier to achieve than others.

Some make good dreams but are flatly impossible! It can feel all good and righteous to rail against others for not seeing YOUR Light but that's just ego-boo. The Universe just doesn't care!

Now I'm at the point where I desperately would like someone to offer real, achievable solutions. If a leader offers me that kind of inspiration I'll be first in line to offer my energy and resources.

However, if it's just someone venting against the way the world works and offering "blue sky" methods of achieving noble goals with zip all in specific details on how to achieve them then excuse me, I'll just keep sitting comfortably on my ass and read a book.

Edited December 17, 2010 by Wild Bill

[William Ashley]

It is unfortunate to foreclose on a widow with young children and put her homeless in the street but if banks couldn't do this, then they would check and recheck, refusing many applicants, before accepting a mortgage.

And this would be bad because? I see what you are getting at, but perhaps banks could include life insurance in family mortgages as a value added service or something, what is their profit margin? Hey even the mortgage would be paid off if the bread winner died. Also the other part is, ok so man dies before company goes bust, counts on the pension to support his wife, then after he dies the company yanks the pension - is this exactly fair to the guy who didn't know or even think the company would renig on the money it promised his wife?

There is good business and bad business, people shouldn't promote bad business practice. Corporatism doesn't serve the public interest when it ignores the public interest so advocating for it is a diservice. This doesn't mean corporations or businesses can't be profitable, but they shouldn't be profitable at other peoples expense and well being - they should help improve it. Things are generated there is a margin of "creation of wealth" that doesn't require robbing people.

The balance of fair dealing is lawful conduct, insuring the public interest, and fulling the companies needs. If any of the three is not able to be maintained non action is a better course than action. It is a social trust that comes as being an incorporation, and a requirement of directing a company on a basis of fiduciary trust.

If the government changed the rules and let the widow keep the house, she would be happy. But many more widows in the future would never get to own a house at all since banks would never take the risk to lend to them.

Harm done is worse than no harm done.

What would happen between young women and men if the government in ad hoc fashion suddenly absolved men of their financial obligations in divorce proceedings?

Explain how this is relevant to the discussion and I'll give you an answer.

----

We all make choices in life. It happens that some of the employees of Nortel, in hindsight, made bad choices. (I am certain that many employees elsewhere have learned from the Nortel experience.)

This is simply offensive. If someone promises to give you something for doing something for them, and then they don't, it is fraud.

If you grew up in a family where your older brother always made mistakes, but your mother always came to his aid and defended him, what conclusion would you draw?

That family is important, and your brother accomplishes far more with a mother than without one.

Edited December 17, 2010 by William Ashley

[Argus]

Wish I had a pension to be cheated out of.

Instead me and my employer are just paying for the gold plated public sector pensions, of which we receive nothing of.

Actually, public servants themselves pay for their pensions, which are far from gold plated, nowhere near as good as what politicians, get, for example. To say nothing of the glorious pensions the private sector auto workers got - for which they paid not one cent during their entire careers.

In fact, there was a surplus in the federal public service pension plan some years back so the government took it to use on general revenues - some $65 billion I believe.

Edited December 18, 2010 by Argus

[William Ashley]

On the mortage issue

Mortgage life insurance vs. term life insurance

Depending on your age and health, the premiums on mortgage life insurance can be much higher than what you would pay for a term life insurance policy. Take a look at these comparisons for $250,000 coverage:

For a couple aged Monthly bank mortgage insurance premiums* Term 10 monthly life rates**

30 **$36.00 **$24.53

35 **$52.00 **$28.13

40 **$80.00 **$36.00

45 **$116.00 **$49.95

50 **$160.00 **$73.35

----

but we are talking about $1000 to $2000 dollar per month payment cuts here... (that is how much these robbed pensions are costing the people that were due them for the work that was performed years back) if that money was given up front it would have paid for life insurance policies that would have returned much more money than the pension.

If life insurance policies were provided instead of pensions you might see more payouts than say CPP widower or pension widower payments.

On a $12000 to $24000 loss per year .. what is the math saying on this one.. the pension plans would have been better in placing life insurance policies on pensioners who they would have to pay out to widows on those pension agreements.... so the policy would pay for in excess of the pensions owed. They could have made money from the policies...

It would take ONLY $13,000 to insure a pensioner from age 30 to 55. -- that is 1 year of widow payments.

how much does freedom 55 cost?

This is a 250,000 coverage..

so that $13,000 investment would cover term life insurance that would cover to a return of nearly 2000% return.

Of course not everyone is going to die by 55.

based on this is 1 in 20 pensioners dies by 55.. then the cost of insurance would pay for itself.

I don't have exact statistics for canada but here is some inputs from the US

AGE OF DEATH ANNUAL RATE PER 100,000

1-4 38.3

5-14 22

15-24 90.3

25-44 177.8

45-64 708

------------------

over 65 5,071.4

It appears

41 percent of men who smoked a pack or more a day died in middle age, compared to 14 percent of those who never smoked

This statistics would seem to say 14% of non smoking men die in middle age.. statistically if this holds true for nortel employees the life insurance scheme would pay for the pensions..

it appears 1 in 10 or more die in middle age.. meaning the 2000% return would supply atleast twice as much money as was input.

2000/10 = 200

2x value input on insurance policies.

adjusted for inflation this might be 1.5x inflator value.

a 150% ROI is a good invesment imo

and that 150% roi translated into a 200% roi not based on inflation.

you could actually question what a larger insurance policy would mean.. or how insurance companies stay in business if socialized life insurance were the norm with a statistical 1 in 10 middle age death rate..

Perhaps the Key to better CPP is simply putting out life insurance policies and paying CPP as a life insurance policy...

This would work out to a 200% return on CPP inputs based on the raw figures. meaning it would inflate the fund at the middle age mortality rate. currently stated as 14% (or 1 in 8 or so) (with profit if the rate is less than 1 in 20)

hopefully you see how statistically socialized life insurance will make the government money.

as long as middle age people keep dying the government keeps earning.

Until someone sobers me up from this realization.. I'm going to advocate for socialized life insurance.

Here is a view from a disabled nortel employee

http://protectourtomorrow.com/files/documents/miscDocs/Bodie%20-%20C-501%20presentation%20(3).htm

Edited December 18, 2010 by William Ashley

[jbg]

I was a little upset to see that the Conservative Party opted to manipulate pensions even more for Nortel widows.

This is an issue that continues to be problematic for me because I think the way pensions are handled in general do not protect workers, and actually represent a form of fraud, much like CPP and OAS ' these pensions that may or may not exist even if they are promised, or given in a false pretence.

Both fraud and false pretence are criminal acts in Canada, yet the conservative party of Canada is supporting both those types of immoral activities as a basis of government.

Workers ought to get the benefits they are promised. Pay should come before dividends.

http://www.ottawacitizen.com/life/Nortel+pensioners+thrown+wolves/3978946/story.html

An inflammatory post title to an inflammatory post. Is ther another side to this story?