Wabush Mines pensioners in Newfoundland and Quebec will see some reversal of the pension cuts that went into effect when the operations’ parent company filed for creditor protection in 2015.

When Cleveland-Cliffs Inc. shuttered Canadian operations, it left the defined benefit pension plan underfunded, subjecting pensioners to a benefits cut of more than 20 per cent. As an unsecured creditor, the pension plan doesn’t have priority over the company’s numerous other creditors.

Read: Terms of Wabush settlement to include $18M payment towards pension shortfall

As Benefits Canada reported in April 2018, terms of a settlement for Wabush Mines’ former employees and retirees included an $18-million payment to address a $28-million pension shortfall.

While the exact numbers are still being finalized, they represent a significant improvement, says Tony DePaulo, assistant to the director for the United Steelworkers’ District 6 office. “[For] the members in Newfoundland, their pension is going to be funded at 93.8 per cent. In Quebec, pensioners will end up getting up to 92 per cent.”

Members in Quebec who were laid off from the mine, but who haven’t yet reached retirement age, are expected to receive 89 per cent, adds DePaulo. “It’s a far cry from the initial numbers of 23 per cent they were going to lose.”

Read: Ontario appeal court decision could change pension landscape in bankruptcy proceedings

iA Financial Group won the bid to take on the pension, he says, so retirees will receive a lump-sum payment by the end of April and then begin to see the increased pension benefit paid out.

“It’s never great when our people lose their pensions through this [Companies’ Creditors Arrangement Act] process. I mean, it’s no secret, we think it’s legalized theft, the way these companies run away. But the people are happy we kept the fight up and, like I say, we went from them losing 23 per cent and got them up to, especially in Newfoundland, 93.8 per cent.”

Cleveland-Cliffs didn’t respond to Benefits Canada‘s request for comment.

Copyright © 2019 Transcontinental Media G.P. Originally published on benefitscanada.com

Join us on Twitter

Add a comment

Have your say on this topic! Comments that are thought to be disrespectful or offensive may be removed by our Benefits Canada admins. Thanks!

* These fields are required.
Field required
Field required
Field required