May 10, 2012

Legislation to delay N.S. paper mill pension windup

4 plans will have 11 years to recover

The government of Nova Scotia has tabled legislation to delay the windup of underfunded pension plans at the former NewPage Port Hawkesbury paper mill in Nova Scotia.

Premier Darrell Dexter said his government has decided to table legislation in order to help workers and pensioners avoid an immediate windup hit of up to 30 per cent or more to their pensions, according to media reports.

The three pension plans for unionized workers employed in woodlands, clerical and the mill are undervalued by a total of $115 million. An immediate windup would see pensioners receive about 65 cents on every dollar, while a delay could boost that to around 70 cents if markets recover.

Labour Minister Marilyn More said the pensions at the mill — three for unionized workers and one for non-unionized — would have up to 11 years to recover from low investment returns and interest rates.

Workers can opt in or out of the extended windup, said More.

The mill was closed last September and is under creditor protection until the end of the month.

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