It’s a case that has wide-ranging implications for pension plans when companies file for bankruptcy. In a 5-2 decision, the Supreme Court of Canada ruled today that pension plan holders at Toronto-based aluminum processor “Indalex Limited” will not have funds set aside for them during insolvency proceedings. This decision overrules an Ontario Court of Appeal ruling from 2011 which said pensioners should receive priority when the assets of a failed company are sold.
This article was published by AM740 Zoomer Radio on February 1st, 2013. To see this article and other related articles, please click here.
Susan Eng is the Vice President of Advocacy for CARP – a new vision of aging. She told Zoomer Media News, “the pensioners are now out of luck. By definition a bankrupt company does not have enough money to pay all the creditors. And so, you basically share with the people last in line to get your money from the company. And so, that’s where they are now. They’re going to go back to the back of the line and suffer a major reduction in many cases, in the pensions that they will be seeing.” But Eng goes on to say, “there is a positive in all this. This is an opportunity for the government now to deal with legislation that was proposed and voted down in parliament already, twice, in an attempt to protect pensioners in the case of a bankruptcy…Now it’s back in the court of parliament to make the change to better protect pensioners in the case of a bankruptcy.”
As for the Indalex pensioners, they could could see as much as a 50-percent drop in monthly payments. And pension funds set aside for them after the Ontario Court of Appeal ruling are now going to Indalex U.S.
By: Jane Brown 1st February 2013
LISTEN to Susan Eng’s Interview with AM740’s Jane Brown: Susan Eng & Jane Brown – Indalex