After going through months of uncertainly over the future of the Corner Brook Pulp and Paper pension plan nearly two years ago, Gerald Parsons is breathing a little easier these days.
Parsons is chairman of the Corner Brook Pulp and Paper Union Pensioners Committee. He said the committee had a meeting at the mill Tuesday afternoon about the state of the plan and updated pensioners during a meeting at the Glynmill Inn later that night.
“Our pension has come a long ways from what it was, Parsons said Wednesday.
Two years ago, the plan was funded to only 68 per cent and, as part of efforts to keep the mill running, parent company Kruger Inc. asked pensioners to agree to go from a five-year plan to fund the pension to a 10-year plan.
The idea was the extension would free up capital for the company to invest in the operation to ensure its continued viability.
The pensioners agreed and Parsons said they are now seeing some improvement.
The plan is now 83.3 per cent funded.
“It’s good,” said Parsons, adding it’s great news for retirees who, back in 2012, didn’t know where it was going. This is a good news story. Two years ago, it was a bad news story.”
And he’s optimistic things will continue to improve.
Parsons said depending on what happens with the markets, the prediction is the pension plan will be 100 per cent funded in two to 2 1/2 years.
He said Kruger is meeting all of its obligations under the funding plan and making the necessary payments as part of the deal. He noted once the plan gets to 100 per cent, the 10-year deal ends and goes back to the original five-year plan.
Parsons said pensioners don’t have to worry that their pension will be gone if the mill closes.
He said if the mill closes, Deer Lake Power would still run and, because the power plant is part of the pension plan, the committee would look at arguing that its plan should be maintained.
But if that doesn’t pan out, that doesn’t mean the pensions will be lost, Parsons said.
“It doesn’t work that way. If the mill shuts tomorrow morning and our pension is at 83.3 per cent, then they’ve got to buy annuities for us. And whatever the annuity is, that’s what it stands. But that will be the second resort for us because the first resort is to find out what’s going on with Deer Lake Power.”
The Corner Brook Pulp and Paper pension plan was set up in 1946 and has 640 retirees on it. Parsons said more than $16 million in pensions came into Corner Brook last year alone.
The Western Star