The lawsuit claims losses to date of approximately $3 million and ongoing losses in excess of $15 million.
Pope & Talbot had extensive lumber and pulp operations in British Columbia, but filed for bankruptcy in 2008. At that time, the pension plan was underfunded and had a 30-per-cent deficiency.
William Faminoff, a lawyer based out of Vancouver, noted the provincial pensions legislation allows company-funded pension plans to slide into periods of deficiency, and because of that, the pensioners felt their pensions were safeguarded.
“At the time of the bankruptcy, there was more than enough assets in the plan to pay the retired members their full pension benefits,” said Faminoff, who represents the group of 88 retired employees and widows of employees.
When it became clear their pensions were being cut, the group sought answers from the Financial Institutions Commission (FICOM) of B.C. and former Superintendent of Pensions Alan Clark.
“It first involved an action to review the activities of the former officers and directors of Pope & Talbot as to how the (pension) plan was underfunded,” explained Faminoff. “After that matter was concluded, it became readily apparent that the government took steps that we feel are contrary to the law.”
In 2010, the pensioners received letters from Morneau Shepell, a company hired by Clark to administer the pension plan, which informed them that their pensions had been reduced by approximately 30 per cent, retroactive to 2008.
“A lot of these guys only have their pensions and when one third of your pension gets taken away, how do you think this impacts you when you’re in your last years of your life?” asked Faminoff. “For a lot of the guys it has been dramatic.”
Don Stewart, one of the claimants and a member of the steering committee of the group, agreed.
“I think that some of the members are feeling quite uncomfortable,” Stewart said. “They’ve had a reduction in their pensions and I have a feeling some of them are not feeling too good. Financially, some people may be hurting.”
Stewart stated because it has already been three years, some of the older employees hope to see something quick.
“The intention is to get our pensions re-instated 100 per cent,” Stewart concluded.
It is alleged that Clark and members of his staff contacted management at P&T in the company’s final months demanding that it get rid of the priority provisions in its pension plan. When P&T refused, Clark reportedly ordered that the provisions be disregarded.
The pensioners say Clark had no authority to overrule the terms of a validly registered pension plan and distribute the plan’s assets according to their preferences. FICOM was contacted but declined comment.
“To take funds away from those members of the plan, that were already retired, that already had their pensions protected by a private, not government, pension plan and they arbitrarily broke those registered provisions with the government,” stated Faminoff.
The lawsuit is aimed at returning the pensioners’ plans to their full amount and not to disrupt the pensions of younger members, Faminoff added.
“I want to stress that none of our clients want to see the younger guys have any difficulties in respect to any kind of pensions benefits,” he said.
Faminoff hopes the matter can be resolve amicably with the government.
“But failing that, we are going to stress that the courts move very quickly on this because those people we represent are senior citizens and some of our clients have passed away since we first took them on as clients,” he pointed out. “We are concerned with their health and life expectancy, so we are going to ask the court to expedite this.”
The trial is expected to begin early next year, in which Faminoff aims to have litigation proceedings commence.
Pope & Talbot had operations in Nanaimo, Grand Forks, Castlegar, Fort St. James, Midway and Mackenzie.