Sears Canada’s Pensioners’ May Lose Financial Livelihood
After announcing $9 million in bonuses for executives to keep the business afloat, Sears is trying to shrug off its obligations to pensioners. Many Sears employees have worked for decades, taking part of their compensation as salary – and the rest as a future pension.
Now Sears is trying to walk away from that pension obligation. This leaves thousands of retirees at risk of losing their pensions, their retirement security and their peace of mind.
To make matters worse, not only are companies walking away from unfunded pension commitments, they are cutting the amounts they do fund, further reducing their ability to pay their pension obligations. Is your pension safe?
When companies declare bankruptcy, pensioners and their pensions are given the short stick. The assets that are available go to secured creditors and executives who often walk away with their wallets unscathed. This happened with Nortel, Target Canada, and Indalex Canada. CARP wants to change that, arguing that in the event of bankruptcy, pensioners should have super-priority when assets are distributed.
“Bankers have other loans, creditors have other customers, but pensioners typically have their entire future financial security at stake.” Wanda Morris, VP of Advocacy, CARP.
Take Action – Put Pensioners First
You Can Help:
1. Sign CARP’s Petition to Put Pensioners First
- Amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act so pensioners rank ahead of secured creditors in priority of repayment of obligations.
- Make company funded pension insurance mandatory for all provinces. Ontario retirees have some protection. All pensioners should have at least as much.
Facts & Figures
- 16K+ Sears Canada pensioners may lose $266.8 million in retirement benefits if Sears declares bankruptcy.
- 2,900 laid-off employees are being let go with no severance or pension benefits.
- Sears Canada is paying out $9.2-million dollars in retention bonuses to executives.
- In 2015, 4.2 million employees had defined benefit pension plans according to StatsCan; 1.3 million of them are with private companies that face the risk of bankruptcy or restructuring