June 1, 2009
We received the Court’s judgment on June 1, 2009. The Court’s decision does two things. Going forward, a new and reduced transfer ratio of 69% will apply to commuted value transfers out of the Plans.
Secondly, the Court agreed with KM, Nortel and the Monitor that “Transition Members” should be treated differently in the circumstances. Transition Members are individuals who received election forms to exercise their commuted value payments at the transfer ratios of 85/86% and who:
1. have requested but did not receive a commuted value payment as of May 21, 2009; or
2. have not yet returned their preferred option as of May 21, 2009.
There are approximately 490 individuals in the Transition Member group.
In balancing the interests of all Nortel pension plan members, the Court held that Transition Members are entitled to receive (or elect to receive) the commuted value of their pension at the 85/86% transfer ratio. For those who have not sent in their forms, they must deliver them to Mercer within the applicable deadlines.
The postponed commuted value payouts that were promised for May 25, 2009, will be made as quickly as possible. As we know that you are anxious to receive your commuted value payments, we will update you immediately once we receive any further information in this regard.