The Most Frequently Asked Questions

Updated December 2011

 

Sample Q&A’s - A comprehensive Listing is Located In the Members Area

 

(Place your mouse pointer over the question, and then left click to go directly to the answer)

 

1.      Why are we not representing active employees?

 

2.      Will the SSPO work to protect the pensions and benefits of salaried retirees from a Quebec or Alberta plant?

 

3.      What is the difference between CCAA and the Bankruptcy and Insolvency Act, which is designed to liquidate a company?

 

4.      Does SSPO work to protect 'Top Hat' pensions of executives?

 

5.      Are the widows or widowers of salaried retirees represented by SSPO?

 

6.      What can happen to pension and benefits during CCAA?

 

7.      Why are the Pension Plans under-funded?

 

8.      Does completion of the CCAA process bring closure to our pension and benefit concerns?

 

9.      As an active employee who is a member of SSPO, will my interests be represented?

 

10.   What is the Canadian Federation of Pensioners (CFP)?

 

 

1.  Why are we not representing active employees?

 

We are a group working to protect pensioner’s interests, although any successes we have will most likely be of benefit to ALL who are in the salaried plans.  However, any such benefit would apply on AFTER a member retires.  We cannot represent anyone who still has an employer-employee relationship, as that gets into the realm of a union and we are not a union and have no intentions of becoming a union.  Our group simply cannot act as your agent with Stelco.  We hope you understand our position and continue to belong to our group as a means of contributing to your future as a RETIREE.

 

 

2.  Will the Stel Salaried Pensioners Organization work to protect the pensions and benefits of salaried retirees from a Quebec or Alberta plant?

 

1.      If you are a salaried retiree, retired from a plant outside of Ontario, but are a member of an Ontario registered plan, then YES, the Stel Salaried Pensioners Organization will work to protect your pension and benefits.

2.    If your pension and benefit plan originates from a plan other than Ontario then unfortunately, as our retained lawyers only deal in Ontario Law, we are unable to represent you.  It will be necessary for you to pursue other means to protect your interests.

 

NOTE:  If uncertain as to which category you are in (i.e. 1 or 2 above), you should contact your respective Human Resources Department and request a letter of confirmation as to which province your pension and benefit program originates.

 

3. What is the difference between CCAA and the Bankruptcy and Insolvency Act, which is designed to liquidate a company? 

 

Briefly, within CCAA there is a ‘stay of proceedings’, which prevents creditors from taking action against the company.  This is of limited duration and must be extended frequently. If a company’s restructuring effort fails then the next step is insolvency, at which point the secured creditors, such as banks for example, have first priority of the assets.  The unsecured creditors, including the pensioners and employees among many, get what’s left (not including the pension funds which are separate and secure, to the degree that they are funded).

 

4.  Does SSPO work to protect the ‘Top Hat’ pensions of executives?

 

The SSPO mandate excludes so-called ‘top hat’ (or top-off) pensions, and only covers the basic pension plan portion. Normally executives are also members of the Basic Pension Plan(s).  By law, the Basic Plan is currently limited to a maximum benefit of approximately $60,000 per year. Pension payments in excess of $60,000 per year are the responsibility of the company and not the pension plan(s).  Therefore, “Top Hat” pensions are guaranteed by means of a personal contract made between the employee and the employer at time of retirement, and the top-off payments must be funded from current corporate revenue and not the basic pension plan. 

 

Normally persons receiving a “Top Hat” pension are also members of the basic salaried pension plan(s).  Therefore many of those receiving ‘Top-Off’ pensions have chosen to support SSPO’s efforts in protecting the Basic Pension Plan.

 

5.  Are the widows or widowers of salaried retirees represented by SSPO?

 

Yes.

 

6.  What can happen to pension and benefits during a CCAA insolvency?

 

Benefits can be reduced and pension plans can be wound up during the CCAA process.  How and when this occurs is all part of the negotiations.

 

 

7.  Why are the pension plans under-funded?

 

In the 1990s a change was made to the regulations that allowed very big companies to not fund on a solvency basis (that funding required to ensure the plan is fully funded on wind up).  It was assumed that such large companies would not go bankrupt.  Because Stelco took advantage of that regulation, and low interest rates, Stelco’s plans would not be fully funded on wind up, if indeed, they are wound up.  Regulation 5.1 was an admittedly bad regulation, and has since been closed to new members. Upon exiting CCAA (2006), the Stelco (now US Steel Canada) pension plans were officially removed from 5.1 and the company agreed to a 10 year plan of fixed payments aimed at returning the Plans(s) to full solvency by the year 2015. Unfortunately, for the past few years, globally depressed capital markets and stubbornly low interest rates have generally served to undermine and/or somewhat neutralize those efforts.

 

 

8.  Does completion of the CCAA process bring closure to our pension and benefit concerns?

 

In the near short term, “yes”.  However, on the other hand it’s possible for Stelco (now US Steel Canada) to once again seek and obtain CCAA protection in the future (as Algoma Steel has done).  In this event, pensions and benefits would be once again place in serious jeopardy.  Given the current global economic chaos and instability, SSPO firmly believes it is more important than ever for pensioners to remain united and to have a sizeable contingency fund at the ready to protect their interests should the need suddenly arise. 

 

There is significant advantage in being part of a large group.  There is strength in numbers and numbers can generate significant resources when and if the need should arise.  A large group of stakeholders can also make themselves heard by governments and the courts, and effectively made their presence felt whatever the future may hold.

 

 

9.  As an active employee who is a member of SSPO, will my interests be represented?

 

Legally, SSPO only represents salaried retirees, not active employees.  However, there is a considerable overlap of interests, especially for those close to retirement.  Salaried active employees may want their own group to represent their special interests not covered by SSPO.

 

10.   What is the Canadian Federation of Pensioners (CFP)?

 

The Canadian Federation of Pensioners is a non-profit, volunteer organization of retiree pension groups. The purpose of CFP is to use ‘strength in numbers’ to advocate on behalf of pension groups and retirees for pension security and reform. CFP was founded in 2005 by Stel Salaried Pensioners Organization, Dupont/Invista Pensioners Assoc. and Bell Pension Group and was incorporated in 2010. Today it has grown to 11 member pensioner organizations representing in excess of 250,000 pensioners. There are 2 political action committees; one Federal and the other Provincial. Members are urged to visit the CFP Website often:  http://www.pensioners.ca/ to update themselves on current CFP activities.  Or click on the Board Room Tab appearing in the menu bar at the top of this page, and select Federation Activities and/or Political Campaign. 

 

 

Additional Typical Q&A’s Posted to The Members Area:

 

What is the benefit provided by PBGF?

 

Effect of closure of USS Hamilton Plant on Retiree Pensions and Benefits?

 

In the event of a wind-up, how might the bridging benefit be affected?

 

 

What is the Pension funding obligation that US Steel agreed to when they   purchased Stelco Inc.?

 

Hilton Works is badly contaminated.  If Stelco (now US Steel Canada) was liquidated who would have first option on the assets, secured creditors or environmental clean up?

 

What conditions might trigger a wind up of the Hamilton Bargaining Unit Plan or allow application for a wind up?

 

If US Steel was to go bankrupt, what is the legal obligation of    government?

I’ve heard that the hourly plans are more under-funded than the salary plans.  Could they all be merged?  

 

How many pensioners are under 65 years of age?

 

What are the management and investment strategies for the four main U.S. Steel Canada (formerly Stelco Inc.) Pension Plans?