Employees of former N.W.T. barge company face pension cuts and back payments

·4 min read
NTCL pensioner Wyatt Rathwell with his dog, Buddy. Rathwell is required to pay back almost $30,000 in pension overpayments. After an initial reduction of 18.62 per cent, he still doesn't know what his monthly income will be. (Submitted by Wyatt Rathwell - image credit)
NTCL pensioner Wyatt Rathwell with his dog, Buddy. Rathwell is required to pay back almost $30,000 in pension overpayments. After an initial reduction of 18.62 per cent, he still doesn't know what his monthly income will be. (Submitted by Wyatt Rathwell - image credit)

Former employees and pensioners of the defunct Northern Transportation Company Limited (NTCL) received a disturbing letter in the mail last month.

The letter, dated May 6, informed former NTCL employees that their monthly pensions would be reduced by 18.62 per cent. On top of that, they have been overpaid since April 2020, money they are now expected to pay back.

"We don't know what to do, our hands are tied," said Wyatt Rathwell, former chief engineer at NTCL and a pensioner. "I've gotta pay back $30,000 now."

It's been almost six years since NTCL declared bankruptcy and sold its assets to the territorial Department of Infrastructure. At the time, the pension plan had a deficit of $21 million. In their bankruptcy proceedings, NTCL partially blamed the pension plan's cost for its high debt.

NTCL
NTCL

During the bankruptcy proceedings, the Public Service Alliance of Canada (PSAC) tried to protect the pension plan.

"Once NTCL declared insolvency, they are former employees," said James Infantino, pensions and disability insurance officer at PSAC. "But we still had a responsibility for them."

PSAC was not able to hold the territorial government responsible for the pension plan because the government contracted Offshore Recruiting Services Inc. to operate the company. That meant the territory was not considered the successor employer, and so not responsible for the pension plan.

PSAC was successful in getting some of the revenue from the sale of assets transferred into the pension plan but it remained substantially underfunded.

Pensioners overpaid for 2 years

The May 6 letter was from the company managing the pension — Lifeworks (formerly Morneau Shepell) — and was signed by Lifeworks principal Debbie Gallagher. Pensioners also learned that the pension plan was terminated on March 31, 2020. But Lifeworks only received approval of the termination report from the Office of the Superintendent of Financial Services (OFSI) on March 31, 2022.

"We were required to pay you 100 per cent of the portion of your pension based on federal legislation until the termination report was approved," wrote Gallagher.

NTCL
NTCL

That means pensioners are on the hook for the overpayment between April 2020 and March 31, 2022.

CBC reached out to Lifeworks to find out why there was such a long delay between the termination of the pension plan and the approval of the termination report.

'In the preparation of the termination report, Lifeworks uncovered a number of data issues that had to be rectified with the help of the prior administrator," wrote Heather MacDonald, senior manager of corporate communications, in response. "A final report was provided to OSFI on October 18, 2021, and approved on March 31, 2022."

Territorial gov't not responsible for private business failure

Rathwell said that Lifeworks will purchase an annuity on behalf of the pensioners and deduct the amount owing from the annuity purchase price. This will mean another reduction to pension payments, a figure which is still unknown.

The uncertainty of the final pension amount is not sitting well with NTCL pensioners.

"We've all been overpaid," said Rathwell. "I could lose another 20 to 30 per cent, I really don't know. And it's kinda nerve-wracking."

Doreen Farrants, former corporate services manager at NTCL, shared her frustration with the outcome.

She wonders why the N.W.T. government didn't do more to help pensioners who spent their careers in the territory and want to remain in the North. Farrants said that the majority of people who worked for the defunct company were northerners who provided an essential service to other northerners.

"Why would you not take on the pension plan as well and keep it whole for the people of the North, the people that you govern," Farrants asked.

CBC reached out to the Department of Infrastructure for comment. A spokesperson said the situation was unfortunate, but the territorial government is "not in a position to act as a backstop when a private enterprise fails to meet its employee benefit commitments."

"It's a tragedy all the way around," said Infantino from the Public Service Alliance of Canada. "That's what all these pensioners face when the sponsor is going bankrupt and there's no insurance arrangement to protect them."

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