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Sears, Wabush cases put deemed-trust provision back in spotlight

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Murielle:

When the pensions had surpluses the companies had no problems taking our monies out of the plan. This caused huge issues with the underfunding when the economy went sour and the pensions became underfunded. Everything was done to help the companies, change the rules, to make minimal payments back into the plan. This should be taken into consideration in the courts. Anything left over from the company when it becomes insolvent should go to the pension if the company didn’t make the payments that they were supposed to in the first place. It is already owed to the plan. Any loans by banks came after. Pension plans were owed that money before. The banks know the risks when the lend money. They take measures to minimize these risks. Loans usually have insurance on them or have guarantees. I know this sounds simplistic. But money held in trust is just that. We kept paying into plans in good faith and we had the assurance by the companies and by the government that our pensions were protected. We are not asked do you want to contribute and told if there are risks. It is mandatory to pay.

Monday, July 23 at 6:14 pm | Reply

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