# Nortel assets finally on the road to be divided up and eventually distributed



## carverman (Nov 8, 2010)

As a Nortel pensioner, I have experienced a substantial loss of pension income and all the pension benefits in the last 6 years.
It's good news that finally the long dispute over the distribution of the assets are going to be resolved..eventually, 
but I expect the lawyers to get a fair chunk of what will be allocated for the pensioners in Canada.



> The court decisions could bring some certainty for about 20,000 Nortel pensioners in Canada who have seen their benefits dramatically reduced since the company filed for bankruptcy in 2009.
> 
> "We're pleasantly surprised," said Mark Zigler of law firm Koskie Minsky LLP, which represents former and retired Nortel employees in Canada.
> 
> ...


http://www.cbc.ca/news/business/nor...sets-to-be-split-among-subsidiaries-1.3071789


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## none (Jan 15, 2013)

This is good news. I still think it's odd how companies can dip into these pension funds. I think there should be legislation that they be kept at least 90% funded at all times (some flexibility to allow for market tweaks).


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## sags (May 15, 2010)

The settlement seems as fair as possible, but it sounds like some of the lawsuit plaintiffs may appeal to a higher court which will delay another couple of years.

The good news is that Nortel is the poster boy for what could happen to a DB pension plan............and retirees may still get 71% of their money.

It isn't fair...............but 71% of something is better than 100% of nothing.


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## Beaver101 (Nov 14, 2011)

^


> The good news is that Nortel is the poster boy for what could happen to a DB pension plan............and retirees may still get 71% of their money.
> 
> It isn't fair...............but 71% of something is better than 100% of nothing.


 ... or it could be 100% of nothing by the time the lawyers are done with it as note: 



> ...The court decisions could bring some certainty for about 20,000 Nortel pensioners in Canada who have seen their benefits dramatically reduced since the company filed for bankruptcy in 2009.
> 
> "We're pleasantly surprised," said Mark Zigler of law firm Koskie Minsky LLP, which represents former and retired Nortel employees in Canada.
> 
> ...


And is that 71% part of this? Would pensioners get priority over other creditors? 


> The filings say the proportional distribution would wind up giving all the creditors about 71 per cent of the return on their claims.


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## bgc_fan (Apr 5, 2009)

Beaver101 said:


> ^ ... or it could be 100% of nothing by the time the lawyers are done with it as note:
> 
> 
> 
> And is that 71% part of this? Would pensioners get priority over other creditors?


I believe the ruling was that pensioners were to be bumped up the line when it came to other creditors. Before, I believe they were way back with the bondholders at the front. A reason why the bond prices for Nortel fell dramatically with the ruling.


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## carverman (Nov 8, 2010)

sags said:


> The settlement seems as fair as possible, but it sounds like some of the lawsuit plaintiffs may appeal to a higher court which will delay another couple of years.
> 
> The good news is that Nortel is the poster boy for what could happen to a DB pension plan............and retirees may still get 71% of their money.
> 
> It isn't fair...............but 71% of something is better than 100% of nothing.


It's more complicated than that Sags. The Nortel DB pension is separately administered from Nortel under Ontario Pension regulations. I'm sure that Nortel's Quebec employees have similar provincial legislation...however, the DB pension plan is in serious depletion due to Nortel not being around to top it up and the investment climate not being enough to provide enough growth to keep it from shrinking even more, 

so the DB pension plan is in the process of WINDUP, which means that eventually it will not be around to pay out the pensions to all qualified pensioners.

As it is, the fund was seriously depleted (66% funded) about 4 years ago and we pensioners had to take a 33%cut in the monthly pension payments.

Fortunately for us in Ontario, the Ontario Guaranteed Pension Fund kicks in a little bit to make up for the loss, but even with the OGPF I'm down about $300 a month from what I was getting in 2004, when I retired officially from Nortel. 

The Nortel assets after sale totalled about $9 billion Canadian..which will be discounted and distributed against US Claims, British claims and US claims. 

The Ontario Guaranteed Pension Fund that is currently paying partial benefits (up to the first $1000 of pension), will try to recoup most of that $1 billion or so allocated to the Canadian pensioners as well.

However, they (Nortel) still owe me about $82,542 for my TRA retirement benefit and life/dental insurance since they went bankrupt.

In 2011, filled out a claim form with the lawyers in Toronto representing the Nortel pensioners. Of the $82K initial claim, (unpaid TRA monthly benefit + pensioner health/dental/life, it was discounted down to $38,582 when subjected to the claims monitor for the legal action. 

I'm not expecting 71% of my outstanding claim on the 38K..even 10% to 30% would be helpful these days with the high cost of dental work for
me would still be better than nothing at all.


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## Beaver101 (Nov 14, 2011)

^ May I ask what is a TRA retirement benefit or what does TRA stand for?


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## carverman (Nov 8, 2010)

Beaver101 said:


> ^ May I ask what is a TRA retirement benefit or what does TRA stand for?


it was what you would call 'the golden handshake' under the old Nortel DB provisions. A non union (professional/management) employee was recognized for their years of outstanding service to the company. In my case I had 23+years of pensionable service when I was given the early retirement package called the SPLA (special "Pensionable" Leave of Absence) due to my cancer issue, which also included the TRA (Transitional to Retirement Allowance). 
to commence at my official retirement to collect the pension and TRA 12 months later. 

I had to wait about 18 months October 2002 to Nov 3, 2003 to get the full 25 years of service which would mean a larger
pension payment at that point. During my special leave, I was paid 90% salary and also paid CPP and other deductions to qualify for a better pension. 

Nortel and I entered a signed agreement that I would be paid $568.76 for a total of 136 payments from Nov 1, 2003 (start of pension)to age
69 (March 1). This payment, unlike the actual pension payment was not guaranteed and paid out of Nortel's general revenue.

Of course I could have taken a larger payment or even a lump sum ($56K+) (with more tax implications), but I decided to str-e-tch out those payments over the longest period of time to supplement my pension in later years. 
So here is how it was supposed to work Beav.
Nov 1, 2003 to December 31 2008 $568.76 x 62 payments = $35,263.12 (minus income tax)
Jan 1 , 2009 Nortel declares bankruptcy and the TRA payments stop.
Jan 1 2009 to Mar 1, 2015 ( 74 remaining and unpaid TRA benefits) = $568.76 x 74 = $42,088.24
Total TRA benefits IF all had been paid out by now: $77,351.36

Now there was also the value of the health/dental and life insurance benefit over these years (2003=>2015) that would be worth at least $1000 a year in pension benefit, so if added to the $77K would be over $82,542, and that is the number that I initially used for my aggregate claim on claim form B for the CCAA procedings with Kosky-Minsky , but the claims monitor for evaluating each claim rejected it and I had to resubmit my claim to their calculated value.


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## Beaver101 (Nov 14, 2011)

^ You did not have to provide such details ($) but I do appreciate the explanations. Will read and digest... thank you. :tiger:


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## carverman (Nov 8, 2010)

Beaver101 said:


> ^ You did not have to provide such details ($) but I do appreciate the explanations. Will read and digest... thank you. :tiger:


It was a great Defined Benefit. I worked for Bell -Northern Research when I was hired on for many years. At that time (80s) Nortel and BNR were both owned by Bell, so we got an excellent pension plan that was 100% funded by the employer. Later on with Bell divesting themselves of BNR, it got assimluated
into Northen Telecom which then went on a shopping spree for all kinds of companies to expand the business lines and most of these didn't
pay off...a lot of cash was spent needlessly, but upper management wouldn listen to lower management. 

They changed the name to Nortel Networks after they bought Bay Networks, a router company that really didn't pan out...and then..came the recession of 2008...the last nail was hammered into the coffin of the "great goose that for many years laid the golden eggs" for investors and employees alike.

This was an era that we will never see again.


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## sags (May 15, 2010)

My aunt worked at Northern Telecom until she retired. I believe it was their world headquarters located here and they made telephones.

They were a big item in the city. They had their own ball diamonds that I played many a game on.

They were one of the employers around here that people wanted to work for........along with Coke, Kelloggs, 3M, Labatts, Emco...........and others that provided good jobs.

When I hear the name Nortel, I think of the guys at our warehouse who for some mysterious reason all decided they were suddenly expert stock traders, and invested everything they had into Nortel as it fell and fell and fell and fell. "Averaging down" was all the talk, and how much money was to be made when Nortel bounced back to it's former lofty heights.

One guy had saved conservatively since he was 18 years old and lost everything he had saved over 20 years in Nortel. Others had borrowed from banks, friends and family to buy as many shares as they could muster. The phones in the cafeteria were kept busy with calls to brokers to buy, buy, buy.

By the time they realized Nortel was doomed, it was too late and they had lost everything and owed everybody. There were concerns by others about their mental health, as the stress took it's toll.

Nortel was a disaster for many people............employees, investors, lenders, suppliers, retirees all lost.

If I recall correctly, the big problems started to surface when it was discovered that Nortel was giving away their products on margin to their dealers, and was calculating earnings and company CEO bonuses based on false numbers of sales and profits. The products weren't sold and ended up being returned back to the company.

Nothing but poor management brought Nortel down with mismanagement and greed at the forefront of the disaster.

Everyone was blinded by their previous success. Top of the hill...........king of the stock markets........few believed they could collapse.

But then, I started working for GM when they were the biggest company in the world, and by the time I retired 30 years later they were near bankruptcy.


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## sags (May 15, 2010)

When I think of all the companies that used to be located here or in the near area, it is a long list of well known companies that are now gone forever.

Maybe I should compile a list of them all, write a book about it and call it "From Rise to Fall in 50 years".....or "From Powerhouse to Poverty".

Around here, almost the entire baby boomer generation worked somewhere for a long time.............that no longer exists.


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## Beaver101 (Nov 14, 2011)

sags said:


> ... Nortel was a disaster for many people............employees, investors, lenders, suppliers, retirees all lost.
> 
> If I recall correctly, the big problems started to surface when it was discovered that Nortel was giving away their products on margin to their dealers, and was calculating earnings and company CEO bonuses based on false numbers of sales and profits. The products weren't sold and ended up being returned back to the company.
> 
> ...


 .... no, not a disaster for "everyone" ... very profitable for those in controlling and predatory positions and still is.


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## Beaver101 (Nov 14, 2011)

sags said:


> When I think of all the companies that used to be located here or in the near area, it is a long list of well known companies that are now gone forever.
> 
> *Maybe I should compile a list of them all, write a book about it and call it "From Rise to Fall in 50 years".....or "From Powerhouse to Poverty".
> 
> *Around here, almost the entire baby boomer generation worked somewhere for a long time.............that no longer exists.


 ... you should ... put those fine writing/literary skills to work - maybe you can work together with carverman on this. Future Canadians should be know their history.


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## Beaver101 (Nov 14, 2011)

carverman said:


> it was what you would call 'the golden handshake' under the old Nortel DB provisions....
> 
> Now there was also the value of the health/dental and life insurance benefit over these years (2003=>2015) that would be worth at least $1000 a year in pension benefit, so if added to the $77K would be over $82,542, and that is the number that I initially used for my aggregate claim on claim form B for the CCAA procedings with Kosky-Minsky , but the claims monitor for evaluating each claim rejected it and I had to resubmit my claim to their calculated value.


 ... that's a golden handshake for ex-employees (non-management/executives)? :rolleyes2:

Anyhow, on that claims monitoring mechanism - was that for the pension payments or just the health/benefits benefits or were they all lumped together? Who devised that claim form B for the CCAA proceedings - the insurance company, CCAA regulations or the law firm?


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## carverman (Nov 8, 2010)

Beaver101 said:


> ... that's a golden handshake for ex-employees (non-management/executives)? :rolleyes2:
> 
> Anyhow, on that claims monitoring mechanism - was that for the pension payments or just the health/benefits benefits or were they all lumped together? Who devised that claim form B for the CCAA proceedings - the insurance company, CCAA regulations or the law firm?


The pension is a separate issue..not related to the claims against Nortel assets by creditors of which the pensioners are just one of..and at the bottom of the "pecking order", since there are* preferential creditors/contractors* *that want 100% of their claim submitted PLUS INTEREST*; in some cases for financial institutions that had lent out short term loans to Nortel.... Talk about gall!

Claim form B was devised by the legal firm handling the affairs of the Nortel bankruptcy proceedings. They had records on hand from Nortel HR on what benefits were being paid prior to bankruptcy, how much was paid out (or not) as the case may be, and other benefits that were not paid such as severance/holiday pay; etc ; when all employees found themselves without a job on the day of declared bankruptcy. 

Many long time employees (not just the pensioners) were left holding "empty bags" when they suddenly found themselves out of a job. 

The Pensioners formed an association (which I used to belong to, but not any longer), and hired their own legal firm to represent the pensioners of Ontario.
Quebec pensioners and employees may have retained their own legal firms, I don't know about them or about the US employees/pensioners in
Raleigh NC and Richardson Tx, where Nortel had operations for the US telecom markets.


The CCAA is the Federal ACT that is involved with large inter-provincial companies trying to restructure from bankruptcy. Unlike provincial regulations where pensioners are considered higher on the list of creditors putting in claims for the assets of the failed company, the CCAA act has NO such provision. So, in the case of severely underfunded Nortel DB pension plan, the pensioners take what they can get. 

In the US, Nortel pensioners have their pensions protected by the US gov;t....not so in Canada. 

There were several court hearings and the decision was stalled for a couple of years because of excessive demands on the 9 billion dollars of remaining assets (intellectual property such as patents, being sold to the highest bidder) and other material assets sold. It is now 6 years since the bankruptcy
and hopefully things will get settled in the next couple years, before the pensioners start to die off..otherwise it can be considered a shame on
how long term employees, many with serious health problems in their retirement years have been treated, by the Federal gov't and greed of others.
\\
If there was a golden handshake then, there certainly isn't one now. Long term pension benefits (health/dental/life insurance) was terminated 2 years
after bankuptcy in 2009 and it took a court decision to get even those benefits extended for one year.


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## carverman (Nov 8, 2010)

sags said:


> When I think of all the companies that used to be located here or in the near area, it is a long list of well known companies that are now gone forever.
> 
> Maybe I should compile a list of them all, write a book about it and call it "From Rise to Fall in 50 years".....or "From Powerhouse to Poverty".
> 
> Around here, almost the entire baby boomer generation worked somewhere for a long time.............that no longer exists.


and.."Too big to Fail"..that is what the employees and the investors thought about Nortel before their life time investments came crashing down around them.
Many familes that invested their life savings (college or retirement investment) LOST all their life savings. It was a cruel joke played on them,

John Roth (CEO of Nortel Networks) before he retired early and cashed in his stock options had a book written about him "CEO of the year" or something like that.

I tried to find it to read what he had to say about steering "the Titanic into an iceberg' but NOT going down with the ship as was customary for ship captains.

At this point, I would draw a parallel between him and the the captain of the cruise ship Costa Concordia that was deliberately driven into a rock (ignoring the normal course) trying to impress people on how famous he was. The ex CEO was investigated by the Ontario securities commission after he sold millions in Nortel stock options about a year or so, before Nortel started to go under (accused of insider trading) but it was never proven. 



> You figure there has to be someone out there none too pleased about the fact* Roth made $135-million in 2000 from salary and options j*ust before the telecom party ended.



https://nortel.wordpress.com/2006/05/03/the-john-roth-question/
Then after the guy that stepped into his shoes started to "cook the financial books", the writing was on the wall..it was only a matter of time as the stock plummeted to penny stock.


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## Beaver101 (Nov 14, 2011)

carverman said:


> *The pension is a separate issue*..not related to the claims against Nortel assets by creditors of which the pensioners are just one of..and *at the bottom of the "pecking order*", since there are* preferential creditors/contractors* *that want 100% of their claim submitted PLUS INTEREST*; in some cases for financial institutions that had lent out short term loans to Nortel.... Talk about gall!.


 ... not according to bgc_fan's post #5 above, so the order might have changed. As for preferential creditors/contractor's wanting their claim plus interest, look at it this way - services have been provided to Nortel and these contractors need to be paid for their services/equipment rendered/provided and loan-sharks want their money back too. Unlike other predators who comes onto the scene, "supposedly" acting in the interest of pensioners.



> *Claim form B was devised by the legal firm handling the affairs of the Nortel bankruptcy proceedings. *They had records on hand from Nortel HR on what benefits were being paid prior to bankruptcy, how much was paid out (or not) as the case may be, and other benefits that were not paid such as severance/holiday pay; etc ; when all employees found themselves without a job on the day of declared bankruptcy.
> 
> Many long time employees (not just the pensioners) were left holding "empty bags" when they suddenly found themselves out of a job.
> 
> ...


 ... and "just who" are looking out on behalf of Canadian pensioners? 

Interesting that Nortel pensioners have their pensions "protected" by the US government and Canadians? It's a very scary thought of what pensioners get to "take what they can get" with "all the math that still has to be done" as per the CBC news article above.

Shameful pension systems we have here.


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## carverman (Nov 8, 2010)

Beaver101 said:


> ... not according to bgc_fan's post #5 above, so the order might have changed. As for preferential creditors/contractor's wanting their claim plus interest, look at it this way - services have been provided to Nortel and these contractors need to be paid for their services/equipment rendered/provided and loan-sharks want their money back too. Unlike other predators who comes onto the scene, "supposedly" acting in the interest of pensioners.
> 
> ... and "just who" are looking out on behalf of Canadian pensioners? interesting that Nortel pensioners have their pensions "protected" by the US government and Canadians?
> 
> Shameful pension systems we have here.


Well we pensioners tried to approach the Harper gov't in 2009 (we each wrote a signed recommended form letter to the minister of trade and commerce) and it fell on deaf ears. Their position is that Nortel declared bankruptcy under the CCAA and there was NOTHING the Harper gov't could do...or wanted to do. 

There was even an MP that raised this issue (affect on pensioners) and the Harper gov't didn't even blink and basically "fluffed it off" and moved on to other business in Question Period.


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## Beaver101 (Nov 14, 2011)

carverman said:


> Well we pensioners tried to approach the Harper gov't in 2009 (we each wrote a signed recommended form letter to the minister of trade and commerce) and it fell on deaf ears. Their position is that Nortel declared bankruptcy under the CCAA and there was *NOTHING the Harper gov't could do...or wanted to do.
> *
> There was even an MP that raised this issue (affect on pensioners) and the Harper gov't didn't even blink and basically "fluffed it off" and moved on to other business in Question Period.


 .. Harper may not want to do anything about it because Nortel's pension scheme it's not a federal issue but a provincial one. And the question next is why do we have a so-called pensions authority commission established anyways? Seems to be A HUGE WASTE of taxpayers money.

An another scary thought comes to mind is the governing of the newly created ORPP created by the current Ontario government ...


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## carverman (Nov 8, 2010)

Beaver101 said:


> .. Harper may not want to do anything about it because Nortel's pension scheme it's not a federal issue but a provincial one. And the question next is why do we have a so-called pensions authority commission established anyways? Seems to be A HUGE WASTE of taxpayers money.
> 
> An another scary thought comes to mind is the governing of the newly created ORPP created by the current Ontario government ...


Nortels' DB pension is administered by trustees assigned in each province where the pension fund is registered. AFAIK, its' only Ontario and Quebec. 
The pension fund administered in Ontario is at least partly supplemented by the Ontario Guaranteed Pension Fund..thank goodness for that.

The CCAA being a federal mandate just sets the terms for dealing with insolvency.
http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br02284.html


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## Beaver101 (Nov 14, 2011)

carverman said:


> Nortels' DB pension is administered by trustees assigned in each province where the pension fund is registered. AFAIK, its' only Ontario and Quebec.
> *The pension fund administered in Ontario is at least partly supplemented by the Ontario Guaranteed Pension Fund*..thank goodness for that.
> 
> The CCAA being a federal mandate just sets the terms for dealing with insolvency.
> http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br02284.html


 ... and who guarantees the OGP fund?


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## carverman (Nov 8, 2010)

Beaver101 said:


> ... and who guarantees the OGP fund?


??? Actually its the Pension Benefits Guarantee Fund now..must have been a name change along the way. The Nortel DB plan has been in the process of WINDUP.
That means at some point, the residual amount in the DB fund will be acturized (if that is the term) and the lump sum allowance for each member will be available
to be put into a LIF or an Annuity. Those are the only two post windup options offered. I and other pensioners will be getting the necessary option
election forms when that time comes. I expect there will be yet another decrease in my monthly pension once my allocated pension amount is
reinvested. 




> Liability matching
> Funds held in the PBGF are *not matched to the liabilities of the pension plan that is being wound up*. The revised process will require that funds be transferred from the PBGF to the pension plan, thus allowing the Administrator to better immunize the pension fund and minimize its risk of loss in regards to pension obligations.
> In this way, the extent of the PBGF claim can be more effectively controlled.





> A final wind up report must still be filed and accepted by FSCO prior to the distribution of benefits to the members.[/B] The final wind up report should contain a *reconciliation between the estimated and actual PBGF claim.* If necessary, there may be an additional allocation request. A reconciliation of the financial position of the plan between the wind up date and the current date will no longer be required for an allocation.
> 
> *Once all benefits have been disbursed and expenses have been paid*, *any excess funds obtained from the PBGF must be returned to the PBGF.*


https://www.fsco.gov.on.ca/en/pensions/pbgf/Pages/revisedpbgf.aspx

So it would seem that the PBGF will be submitting a claim to the administrators responsible for distribution of the Canadian portion of the creditors against the
Nortel assets, but I'm not sure how that is done. 

I would think it's more of an insurance scheme and not a pension fund..and any money paid out from this fund, has to be returned at some point otherwise,
the taxpayers of Ontario will be ON THE HOOK paying for any shortfall. 

The Nortel DB pension fund isn't the only one in trouble these days due to employers going bankrupt.


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## Beaver101 (Nov 14, 2011)

carverman said:


> ??? Actually its the Pension Benefits Guarantee Fund now..must have been a name change along the way. The Nortel DB plan has been in the process of WINDUP.
> *That means at some point, the residual amount in the DB fund will be acturized (if that is the term) and the lump sum allowance for each member will be available
> to be put into a LIF or an Annuity. Those are the only two post windup options offered. I and other pensioners will be getting the necessary option
> election forms when that time comes. * I expect there will be yet another decrease in my monthly pension once my allocated pension amount is
> reinvested. .


 ... yes, your focus should be on which option to take that's best "suited" for "your situation" ... the LIF where you have control of the monies or the annuity where you give the insurance company your business. 



> So it would seem that the PBGF will be submitting a claim to the administrators responsible for distribution of the Canadian portion of the creditors against the
> Nortel assets, but I'm not sure how that is done.


 ... ? why would the PBGF submit a claim to the administrators (who?) at this point if that fund was supposedly "guarantee" the $1K monthly minimum pension for Nortel pensioners (if I understand it correctly now) or to your point here of more like an insurance scheme than pension fund, 



> I would think it's more of an insurance scheme and not a pension fund..and any money paid out from this fund, has to be returned at some point otherwise,
> the taxpayers of Ontario will be ON THE HOOK paying for any shortfall.





> The Nortel DB pension fund isn't the only one in trouble these days due to employers going bankrupt.


 ... correct and this is why it is so important for at least Ontarian pensioners pay attention to this case, especially they need to rely on pension funds for retirement .. unless they simply don't care.


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## carverman (Nov 8, 2010)

Beaver101 said:


> ... yes, your focus should be on which option to take that's best "suited" for "your situation" ... the LIF where you have control of the monies or the annuity where you give the insurance company your business.


I'm leaning towards a LIF since my days may be shorter than others...with the annuity, the insurance company will take a chunk of the fund for their administration and pay out less
but the same time..they will pay me something until the day I'm gone.



> ... ? why would the PBGF submit a claim to the administrators (who?) at this point if that fund was supposedly "guarantee" the $1K monthly minimum pension for Nortel pensioners (if I understand it correctly now) or to your point here of more like an insurance scheme than pension fund,


It's a bit of a misnomer..the guarantee is only for the first $1000 of the pension benefits. I don't get even that from their fund..more like $300. Don't understand how that works as I lost about 33% of my original monthly entitlement ( about $600) from what I was receiving before Nortel went bankrupt and their DB fund fell into a contribution shortfall, that required a cutback on pension benefits.

Now, I'm down about $300 on the regular pension and $568 on the TRA..so in essence my income has dropped about $11,500 in the last 5 years..with no COLA and the cost of living keeps going up. 

Fortunately I have no debts and no mortgage, so I don't need to eat cat food yet, but that could change when the DB pension plan is
finally wound up as I have no idea what I will be getting then..and expect less than what i'm getting now. :cat:



> ... correct and this is why it is so important for at least Ontarian pensioners pay attention to this case, especially they need to rely on pension funds for retirement .. unless they simply don't care.


Nothing is guaranteed in life..not even life itself.:biggrin:


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## sags (May 15, 2010)

The NDP are now in a three way tie with the Conservatives and Liberals for the federal election, according to a new poll.

Are Canadians THAT fed up ?


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## Beaver101 (Nov 14, 2011)

^ What do U think?


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## Cal (Jun 17, 2009)

none said:


> This is good news. I still think it's odd how companies can dip into these pension funds. I think there should be legislation that they be kept at least 90% funded at all times (some flexibility to allow for market tweaks).



Totally agree. To retire, and not get paid some months is beyond crappy. I mean you hold your end of the deal by working your position as required for X number of years, shouldn't the company pension plan uphold their end of the working agreement.


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## carverman (Nov 8, 2010)

Cal said:


> Totally agree. To retire, and not get paid some months is beyond crappy. I mean you hold your end of the deal by working your position as required for X number of years, shouldn't the company pension plan uphold their end of the working agreement.


Well it depends on the deal you strike with your employer. The deal you sign or are entitled to..iis hinged on many factors, even when the ink is dry on the forms, and the pension obligations of your employer, things can change drastically that can change your retirement situation in life. 

Underfunded DB pensions, a more common reality now (something that was basically unheard of in the 70s, 80s and 90s) , are more typical in tougher economic times.

In the case of my Nortel DB pension, the company management played games by DEFERRING topups to the registered pension plan for a few years (after 2000) because of profit and loss financial declarations. In profitable years, Nortel would take a percentage of their net profits and put that in their
pension plan. Although the company was obligated to put in the top up each year, they got away with it by getting the Ontario pension regulator to allow them to defer the topup to the next year when "they would be turning over a profit" again.

But starting in 2002, they were declaring losses each year, orders were drying up, and the stock price was in a downward spiral..so the top ups were deferred for each year again and again.and then in 2008..disaster struck...and they filed for bankruptcy protection.

Those critical years of have the DB pension plan topped up (5or 6?) were missed, and by 2009, no more topups...all the while existing pensioners and any new pensioners that qualified to draw a pension in those years and lack of a good investment climate to supplement the fund through growth resulted in the fund being over 30% underfunded by 2009.


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## Beaver101 (Nov 14, 2011)

carverman said:


> Well it depends on the deal you strike with your employer. The deal you sign or are entitled to..iis hinged on many factors, even when the ink is dry on the forms, and the pension obligations of your employer, things can change drastically that can change your retirement situation in life.
> 
> Underfunded DB pensions, a more common reality now (something that was basically unheard of in the 70s, 80s and 90s) , are more typical in tougher economic times.
> 
> ...


 ... never mind about employer's "top-ups" or was that more like a 'contribution holiday' and in the meantime employees continue to "top-up" the plan. 

And meanwhile one would think there would be "oversight" by government pension regulators as to where the gravy-train(s) were heading ...


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## Beaver101 (Nov 14, 2011)

carverman said:


> I'm leaning towards a LIF since my days may be shorter than others...*with the annuity,* the insurance company will take a chunk of the fund for their administration and pay out less
> *but the same time..they will pay me something until the day I'm gone.
> *
> ...
> Nothing is guaranteed in life..*not even life itself*.:biggrin:


 ... I say how much faith do you have on the "annuity" calculations (aka one-size-fits-all mortality basis) do you have as far as life expectancy goes?

No doubt even life itself is not guaranteed, *for everyone.*


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## carverman (Nov 8, 2010)

Beaver101 said:


> ... I say how much faith do you have on the "annuity" calculations (aka one-size-fits-all mortality basis) do you have as far as life expectancy goes?
> 
> No doubt even life itself is not guaranteed, *for everyone.*


Not to worry Beav, BB King lived to the ripe old age of 89 with diabetes until he was called to play those "Heavenly Blues'.

I saw an ad on TV recently (I think it was something to do with visiting Michigan) where the announcer says..."25,000 sunrises..that's all most people have.....
.give or take a few"..

...so lets see if he is correct 25,000 /365 (ignoring the leap years) = 68.49 years. So I am already at the "perihelion of my life"..:biggrin:
10 years = 3,650 sunrises 

Somewhere in there is the correct forumula for calculating an annuity..and if the selected company (Sun Life or ManLife) uses it..there will be enough left for me for the rest of my days..
https://www.google.ca/search?q=annu...ch&q=growing+annuity+formula&revid=1286228448


but more than likely (insurance companies being what they are these days..grab more money than they care to pay out) it may be this one...:biggrin:


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## Beaver101 (Nov 14, 2011)

carverman said:


> Not to worry Beav, BB King lived to the ripe old age of 89 with diabetes until he was called to play those "Heavenly Blues'.


 ... true and fans can continue to listen to his Blues jazz which would sound even more heavenly with each passing year. Music history never repeats a legend or a legend never repeats. One of a kind.



> I saw an ad on TV recently (I think it was something to do with visiting Michigan) where the announcer says..."25,000 sunrises..that's all most people have.....
> .give or take a few"..
> 
> ...so lets see if he is correct 25,000 /365 (ignoring the leap years) = 68.49 years. So I am already at the* "perihelion of my life"..*10 years = 3,650 sunrises


 ... oh yeah, I forgot that there was a 'certain' bump where longevity is just in the 'genes'. Or until the insurance company figure out a way to mine those genetics data.



> Somewhere in there is the correct forumula for calculating an annuity..and if the selected company (Sun Life or ManLife) uses it..there will be enough left for me for the rest of my days..
> https://www.google.ca/search?q=annu...ch&q=growing+annuity+formula&revid=1286228448
> 
> but more than likely (insurance companies being what they are these days..grab more money than they care to pay out) it may be this one...:biggrin:
> ...


 ... and those annuity specialists need MBABS.com to figure out all that? ... I thought a graduate needs a PHD for that. :biggrin: On second thought, they do need MBABS.com if they work for the insurance company. :distant:


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## carverman (Nov 8, 2010)

Beaver101 said:


> ... true and fans can continue to listen to his Blues *jazz* which would sound even more heavenly with each passing year. Music history never repeats a legend or a legend never repeats. One of a kind.


 The blues artists don't go into the blues-jazz fusion. BB King was ONE of the 3 kings of the Mississippi delta blues. There were two other "kings"..Albert and Freddy. each one was unique in the way they sung and played the blues. They were what you would consider "purists" when it came to singin the blues.

Of course now that all three are gone, there will be followers that will step up to the plate..and the next generation of blues artists has begun.

Did you know that BB had 15 children by 15 different women/wives?
he obviously was pretty busy ( I guess), when he wasn't playing the blues with his hefty schedule of performances.:biggrin:

No wonder he didn't have time to retire...he had to keep playing to pay all that child support.


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## hoalan124561 (May 17, 2015)

I believe the ruling was that pensioners were to be bumped up the line when it came to other creditors. Before, I believe they were way back with the bondholders at the front. A reason why the bond prices for Nortel fell dramatically with the ruling.


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## carverman (Nov 8, 2010)

hoalan124561 said:


> I believe the ruling was that pensioners were to be bumped up the line when it came to other creditors. Before, I believe they were way back with the bondholders at the front. A reason why the bond prices for Nortel fell dramatically with the ruling.


Yes. This is a recent ruling...before this ruling, the pensioners were unfairly placed below the bondholders and with the unsecured creditors.
it's good news that at least there is some justice in this world..the Nortel pensioners have been hit with a cut in pension benefits and left scrambling to
find their own expensive health, dental and life insurance pension benefits. It is clear that the pensioners will not be receiving 71% of the distributed
bankruptcy assets (7.3 billion overall) but a lesser percentage. 



> A pair of U.S. and Canadian judges have ruled that the collapsed Nortel Networks Corp.’s remaining billions of dollars should be distributed equally among the company’s creditors around the world, leaving more money for its pensioners and less for its bondholders.


However, if the rulings are appealed (and no doubt they may), then this legal battle will continue for a few more years.

http://www.theglobeandmail.com/repo...the-law-page/nortel-decision/article24400059/


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## bgc_fan (Apr 5, 2009)

hoalan124561 said:


> I believe the ruling was that pensioners were to be bumped up the line when it came to other creditors. Before, I believe they were way back with the bondholders at the front. A reason why the bond prices for Nortel fell dramatically with the ruling.


I didn't realise that there was an echo here. Much less that the echo is acknowledged more than the original post.


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## carverman (Nov 8, 2010)

bgc_fan said:


> I didn't realise that there was an echo here. Much less that the echo is acknowledged more than the original post.


Echo!...echo!....yup, definitely an echo on CMF at that time in the morning. Ok..bgc_fan (btw..please tell us what that stands for)..you have the floor...


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## Beaver101 (Nov 14, 2011)

carverman said:


> The blues artists don't go into the blues-jazz fusion. BB King was ONE of the 3 kings of the Mississippi delta blues. There were two other "kings"..Albert and Freddy. each one was unique in the way they sung and played the blues. They were what you would consider "purists" when it came to singin the blues.
> 
> Of course now that all three are gone, there will be followers that will step up to the plate..and the next generation of blues artists has begun.
> 
> ...


 ... no idea and not going to start finding out why ... 15 kids with 15 wives? holy rabbit! ... now if he left a big estate ... will they be rolling him for more dough from the grave?


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## Beaver101 (Nov 14, 2011)

each:


carverman said:


> Yes. This is a recent ruling...before this ruling, the pensioners were unfairly placed below the bondholders and with the unsecured creditors.
> :apathy:world..the Nortel pensioners have been hit with a cut in pension benefits and left scrambling to
> find their own expensive health, dental and life insurance pension benefits. It is clear that the pensioners will not be receiving 71% of the distributed
> bankruptcy assets (7.3 billion overall) but a lesser percentage.
> ...


... and then what's left after the legal battles?


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## Eclectic12 (Oct 20, 2010)

carverman said:


> ... Underfunded DB pensions, a more common reality now (something that was basically unheard of in the 70s, 80s and 90s) ...


I can't help but wonder where this is true on a broad scale or whether there was less attention paid. Certainly the Ontario gov't was alleging in the late 70's and early 80's that the teacher's pension was just about bankrupt, needed two funds merged and might be able to limp along another decade or so. The shortfall was latter traced to the money the province borrowed to buy the "sure fire winner" Suncor shares.

On one hand - there was a shortfall while on the other hand, it was the dipping into the pension that caused it, not benefits or investments that under-performed.


Cheers


*PS*

I also recall being told in the 80's not to count on CPP as it was sliding down the slope to disappearing.


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## bgc_fan (Apr 5, 2009)

carverman said:


> Echo!...echo!....yup, definitely an echo on CMF at that time in the morning. Ok..bgc_fan (btw..please tell us what that stands for)..you have the floor...


It's no big deal, it was just odd that someone's first and only post would be a copy and paste.

Anyway, as for some Nortel history if anyone is interested I would recommend John Tyson's _Adventures in Innovation: Inside the Rise and Fall of Nortel_. He was an industrial/design engineer and started with BNR way back, up until the collapse. While he does discuss some of the personalities like Roth, it is more interesting in discussing some of the innovations that they had produced.

As for my name, bgc just happens to be the acronym for an old 90s Anime that I like.


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## carverman (Nov 8, 2010)

bgc_fan said:


> It's no big deal, it was just odd that someone's first and only post would be a copy and paste.
> 
> Anyway, as for some Nortel history if anyone is interested I would recommend John Tyson's _Adventures in Innovation: Inside the Rise and Fall of Nortel_. He was an industrial/design engineer and started with BNR way back, up until the collapse. While he does discuss some of the personalities like Roth, it is more interesting in discussing some of the innovations that they had produced.
> 
> As for my name, bgc just happens to be the acronym for an old 90s Anime that I like.


Thanks. I will look for that book if it is still in print. Maybe my local library can find it for me.
I remember back in the mid 90s, when Nortel was flying high, and the stock splits; (two-for-1 and I think there was a three-for-1); 
were being offered every couple of years and things were looking up...investors were happy and the guidance that Nortel was offering made sense.

Then in spite of innovation...the upper management under John Roth's leadership started to go "hog wild crazy" buying up a lot of useless dot.com companies with stock offerings diluting the stock. Then when things started to go from bad to worse, they started to consolidate the stock by offering
1 new share for three of the old shares, which had been devalued considerably...the dot.coms were sold off at fire sale prices. 

A possible deal with John Chambers of Cisco, (that may have saved Nortel during the recession), never went through and Nortel bought Bay Networks for 9 billion USD... ..a ridiculous price to pay for basically a second grade router company that wasn't used by the telcos as much as Cisco routers which were becoming the standard for most telcos. This may have been the beginning of the end..as any cash surplus that Nortel had up to then was used up leaving the cupboard bare. In the end, not too many sales resulted from this merger.



> Bay Networks was acquired by Northern Telecom in June 1998 for $9.1 billion,[4] broadening Nortel's reach from its traditional carrier customer base into enterprise data networking. Reflective of this expanded product set and market, Nortel renamed itself Nortel Networks after the merger. In December 2009, as part of its bankruptcy proceedings, Nortel sold its Enterprise Networking equipment and software business to Avaya.


Sometime in the nineties..there was a book about John Roth..I think he was referred to as "CEO of the Year" in this book. I haven't been able to find it.


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## Eclectic12 (Oct 20, 2010)

^^^^

Add to that a friend played hockey with some of the Nortel employees. According to the employee, he was shocked to discover that there were four groups around the world, working on the same thing but because the names were different, they thought each was working on different items so there was no knowledge sharing or tracking of progress.


Cheers


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## carverman (Nov 8, 2010)

Eclectic12 said:


> ^^^^
> 
> Add to that a friend played hockey with some of the Nortel employees. According to the employee, he was shocked to discover that there were four groups around the world, working on the same thing but because the names were different, they thought each was working on different items so there was no knowledge sharing or tracking of progress.
> 
> ...


Yes, that is entirely possible, as the research teams in each country had only "dashed line' reporting to the head office in Bramalea. 
There was a big lab in Ottawa, and there was one in Maidenhead England, a lab in Germany, and of course the big labs in Raleigh NC and Richardson Tx.

Some of the research that was done in Ottawa was 'put on the back burner" after 75% of the research was done and the research money spent,
because there was no market for that technology at the time...ie; the Telcos, Nortel's biggest customers were not ready to buy because they
hadn't allocated their funds to expand their infrastructure. High speed-high capacity fiber optics was one of these. After millions were spent
on research to develop it, it was a tough sell.

Then there was the flip-flop of a the software that was developed for the central control and peripherals for certain European markets...
at the beginning they were gung ho for unique programming (object oriented language) for the new peripherals rather than use the available PASCAL and of course
the PROTEL that was dominant in the central control. As a result this mishmash of overlaid software caused a lot of run time delays,
and eventually they had to scrap it and start over again. 

But even these development issues didn't do the same eventual financial damage that buying up a lot of "dot.coms", which did not fit into Nortel's core business. 
Assimilating them meant raising the already overstretched employee payroll during record expansion...over 30,000 at it's peak, with the hope that these
groups would add quickly to the bottom line..didn't work out at all.

and in the end..the walls came tumbling down...and the governments were not willing to bail them out..

http://www.ottawacitizen.com/business/Where+Nortel+troubles+began/7823499/story.html


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## Beaver101 (Nov 14, 2011)

carverman said:


> ...
> 
> Sometime in the nineties..there was a book about John Roth..I think he was referred to as "CEO of the Year" in this book. I haven't been able to find it.


... I wonder if the "CEO of the Year" is able to sleep well, blind-eyedly knowing some thousands of retirees are fighting for scraps in their retirement plan?


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## carverman (Nov 8, 2010)

Beaver101 said:


> ... I wonder if the "CEO of the Year" is able to sleep well, blind-eyedly knowing some thousands of retirees are fighting for scraps in their retirement plan?


==================================================

Well the big crooks walked away with lucrative pensions and stock options that they cashed in just before the stocks started to slide..insider
trading they were suspected, but never proven...another Enron of sorts. 



> In the go-go years of the telecom boom, every Nortel executive had won the lottery, no one more so than John Roth, who left the company with $130-million and change.
> 
> The company’s board distribution stock options like candies on Halloween night; t*hose long-lasting options came to represent 15 per cent of the shares outstanding.* And when the telecom equipment buying frenzy came to halt, the *board eased the pain for Nortel executives and managers by reducing the price at which the options could be exercised.*
> 
> This was the corporate equivalent of reckless endangerment.





> With the collapse of the Internet Bubble Nortel stock price collapsed. *Market capitalization of Nortel Networks declined from $398 billion to less than $5 billion*, and *more than 60,000 people were laid off by the company*. Roth was criticized after it was revealed that he cashed in his own stock options for a personal gain of $135 million in 2000 alone





> In any case, the real force behind Nortel’s demise — the reckless conduct of the C-suite administration headed by former Nortel CEO John Roth in the late 20th century — was not on trial. Roth emerged from the wreckage with more than $100 million in stock-option proceeds.
> A guilty verdict in that uncalled case has been pronounced over the past decade, by 94,500 former Nortel workers, by investors who lost close to $400 billion as Nortel shares became worthless, and by Canadians everywhere troubled by the sudden loss of one of Canada’s few world-class enterprises.


Adventures in Innovation: Inside the Rise and Fall of Nortel ..available for $19.99 on Amazon. 

John Roth was named Outstanding CEO of the Year in 2000.. a year before he took his stock options and* left a big mess behind*...
he should have been given another title: "Corporate "Bum" of the year" in 2001. 

I thought there was a book written about him..but it was just Bennett Jones that named him that honorary title for 2000..a title he eventually proved not to deserve.


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## Beaver101 (Nov 14, 2011)

carverman said:


> ==================================================
> 
> Well the big crooks walked away with lucrative pensions and stock options that they cashed in just before the stocks started to slide..insider
> trading they were suspected, but never proven...another Enron of sorts.


 ... they only got away because of the elite All Crooks' Club.



> Adventures in Innovation: Inside the Rise and Fall of Nortel ..available for $19.99 on Amazon.


 ... will check it out but much more interesting to read/hear from frontline employees (people who do the real work and makes the company) than those big-ideas executives-management types.:rolleyes2:



> John Roth was named Outstanding CEO of the Year in 2000.. a year before he took his stock options and* left a big mess behind*...
> *he should have been given another title: "Corporate "Bum" of the year" in 2001.
> *
> I thought there was a book written about him..but it was just Bennett Jones that named him that honorary title for 2000..a title he eventually proved not to deserve.


 ... the latter title is too polite. If there is a hell, then guess who belongs there.


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## bgc_fan (Apr 5, 2009)

Beaver101 said:


> ... they only got away because of the elite All Crooks' Club.
> 
> ... will check it out but much more interesting to read/hear from frontline employees (people who do the real work and makes the company) than those big-ideas executives-management types.:rolleyes2:


The author, John Tyson, isn't the big idea management type. He was a big idea designer. He did climb the ranks, but was more into product development and he described the environment more like Google when it came to developing new products.

There is a link to the book website: http://www.adventuresininnovation.ca



Beaver101 said:


> ... the latter title is too polite. If there is a hell, then guess who belongs there.


Worse, he filed a $1B indemnification in the US to protect himself from suits resulting from the bankruptcy. 
http://www.cbc.ca/m/news/canada/ottawa/former-nortel-exec-seeks-1b-protection-from-lawsuits-1.851553


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## IvonHughes (May 28, 2013)

Hi

This morning we updated annuity rates for all the leading life insurance companies on our Nortel page at 

http://www.lifeannuities.com/articles/2015/annuity-rates-for+former-nortel+employees+20150603.html

Annuity rates at lifeannuities.com have not been updated yet, so make sure you look at the numbers on the above page.As you know,they keep changing all the time anyway. Annuity quotes are personal and only your age's and amount can give you a precise figure.

It appears that there will be 2 sets of documents required for each employee involved in the Nortel pension windup There will be an Application and Transfer Form along with photo ID for the insurance company you choose. And then there will be any documentation that Morneau Shepell will require. We will handle all this pension paperwork but don't yet know what Morneau Shepell will require. Apparently the paperwork may be different whether you are a retiree or a terminated employee. If anyone has any information about the Morneau Shepell paperwork, we will be happy to upload it for everyone to share.

And if you have question about about life annuities, just ask and I'll be pleased to answer.

Ivon


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## Beaver101 (Nov 14, 2011)

^ Hi Ivon, thanks for posting your promotion here. 

As a member of this forum (not Nortel ee in any shape or form though), I have a couple of questions on those annuities rates offered,

1. Are they available just for ex-Nortel employees? Or open to the general public? If the latter, then on question #2.
2. Is a sample (indexed) annuity contract available on your website (without registering), just for a quick examination? If so, where can it be found? 

Any reply is appreciated, thank you.


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## IvonHughes (May 28, 2013)

Hi Beaver101,

Thanks for your comments and here are your answers.

1. No, these rates are for everybody;we just haven't had the time to upload them to lifeannuities.com.

2. No we don't have any indexed quotes up at all but I will need a date of birth to concoct one. Do you want 2,3 or 4%?

The big problem with indexed annuities is that they start well below the income you otherwise would have received. In fact it will take 12 years or so for you to catch up. And then to receive the equivalent dollars in total,will take more time.

And you have to live, hopefully in good health, all this time or at least be alive. If you're taking this route after age 65, you'll need to live until about 80 to square the circle.


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## Beaver101 (Nov 14, 2011)

^ Okay, I see the big problem with getting annuities indexed so please do not conoct one. Nevertheless, I appreciate the quick explanation, thanks again.


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## fraser (May 15, 2010)

I have a question.

My understanding is that there is some sort of insurance program in case the annuity firm goes away. Is this based on a per company or is it based on the value of your total annuities? Would it be better to break up your annuities into several providers to minimize you exposure. I realize that this risk is very low.


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## IvonHughes (May 28, 2013)

fraser said:


> I have a question.
> 
> My understanding is that there is some sort of insurance program in case the annuity firm goes away. Is this based on a per company or is it based on the value of your total annuities? Would it be better to break up your annuities into several providers to minimize you exposure. I realize that this risk is very low.


Yes,and here is a link to the pertinent page on Assuris.com. There is a lot of information on this site,but the link below is the most important page.
.
http://tinyurl.com/mewem7t Each annuity payment for each life annuity company has 100% coverage up to $ 2000 a month.

And yes,you are correct in thinking that it is best to break up the capital between different companies so as not to exceeed this level.

Ivon


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