WINNIPEG – MTS Allstream has reached agreement with its unions and retirees over a pension dispute that dates back some 17 years.
The lawsuit regards the administration of one of MTS's pension plans that occurred in connection with the company's privatization in 1997, and was the subject of a decision of a Supreme Court of Canada ruling in January. MTS Allstream said it and its outside advisors have worked closely with its unions and retiree representatives to develop an implementation plan, which was unanimously agreed to late Wednesday by all parties. The settlement agreement provides that:
– Total enhanced benefits available under the settlement will equal $140 million as of July 1, 2014. Thereafter the amount will grow at the rate of 2% per annum until court approval;
– Of this amount, approximately $30 million will be paid in 2014 or early 2015, by the company directly to MTS employees who are members of its defined benefit pension plan;
– The remaining balance of approximately $110 million will be funded from MTS' defined benefit pension plan, and will be used to pay retirees and other persons with interests in the plan, and also pay expenses associated with the settlement. This amount will be funded by MTS over time and in accordance with federal statutory funding obligations.
The specific arrangements are subject to regulatory approval and court approval following a court hearing scheduled for November 3, 2014.
"We are pleased to have come to an arrangement that is equitable and fair that everyone has agreed to, and is now subject to the approval of the court," said CEO Pierre Blouin, in the announcement. "Going forward, we expect this matter to be resolved and there will be no more uncertainty in respect of our pension plan litigation."
