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Goodale warns........


Guest manwest
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I for one am very glad to see Mr. Goodale speak up at this time. He appears to be on the case, and showing appropriate concern for the employees' pension rights and pension security overall.

If I had to read between the lines, he's letting TTI/AC know that he is supportive of the Air Canada pension and its beneficiaries. That's a welcome counterbalance to the pressure that all employees will be faced with as we come down to the crunch.

Good for you, Mr. Goodale. Your reputation does you justice.

neo

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I don't read it that way at all. The pension repayment issue is totally separate from the DC issue and involves a different group of pensioners, i.e. future hires. I think he is looking at the DB settlement in isolation. I am a bit bemused about his reference to a package of requests from AC. I hope he doesn't mean a cash bailout or something easy to turn down. If the feds say no to the 10-year payoff, the alternative might become a conversion to DC or reduction in DB benefits (with the alternative being liquidation). How respectful is that of pensioners' rights

, neo?

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I'll go one step further. If the 10-year repayment doesn't fly, it will mean the airline has to find hundreds of millions of dollars to put into the plan now to reduce the repayment schedule. Victor Li will walk, and no other investor is going forward. In effect, the federal government will have sandbagged the employees and the unions, leaving them a choice of further concessions (either to the current pension plan or wages/benefits, etc) or liquidation.

It's almost as if the government is colluding with Victor Li and/or management.

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Guest directlaw

I am a bit bemused about his reference to a package of requests from AC. I hope he doesn't mean a cash bailout or something easy to turn down

He might be referring to the Government policy guarantees TTI is looking for as a condition for purchase. The monitor does not say what policy guarantees TTI is looking for just that they must be acceptable to TTI.

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Man, you sure saddled that horse and rode it out'a town. :)

First off with regard to pensions, I don't see things being nearly as separate as you, not at this stage of the game. Our pensions and wages both are under threat. I for one will welcome any ally that fortifies and protects the employee's retirement benefits.

There may be issues to be resolved about the Air Canada DB pension plan, such as repayment schedule (as opposed to repayment term) and security of those funds when they're commited. Would you know anything about those issues?

Mr. Goodale appears to have signalled that he is keeping a close eye on this situation, and appears keen to preserve beneficiary rights. How can that be a bad thing for Air Canada's employees?

I won't speculate about what Mr. Goodale might do down the road. But it makes no sense to imply that he would readily put Air Canada into liguidation over the repayment schedule, or anything else. What would be the point of that? And likewise, what then is the point of your question?

neo

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I suspect that besides granting AC, and any other company that applies, leave to extend it's payment schedule, he will change the rules so that it is no longer acceptable for any company to take pension holidays. That would go a long way towards fixing the problem of underfunded pensions.

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Guest CB allquads

I think what Goodale is saying is OSFI wants to know what the final pension deal is with TTI before allowing any changes to the current rules. OSFI wants to know what the pension deficit is going to be; the current 1.2B or 600M (reduced by early retirement changes). OSFI won't approve 10 year funding for 600M. OSFI also wants to make sure that the defict is not going to get any worse.They still want the deemed trust. The problem with that is that the payment schedule will probably be lower the first 2 years because that is the most critical time coming out of CCAA, that is it won't be a simple 1.2B divided by 10.

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Guest Gone Flying

I wonder if the feds will allow contributors(employers) to deduct from income contributions to the over funded pensions or if they will only allow the deductions to the under funded plans? And will the changes to DC from DB be costed in terms of early retirement or will the 600m net allow TTI pickup its share of AC for 50m?

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Ontario Teachers' Pension Plan slams Ottawa's proposed income trust limits

Last Updated Thu, 25 Mar 2004 14:38:12

TORONTO - The powerful Ontario Teachers' Pension Plan said federal government plans to limit investments in income trusts by pension plans will put them at a "significant disadvantage to other Canadians and all foreign investors."

In his debut budget earlier this week, Finance Minister Ralph Goodale proposed limiting pension funds to holding no more than 1 per cent of fund assets in business income trusts, and no more than 5 per cent of the units of any business income trusts.

http://www.cbc.ca/stories/2004/03/25/business/teachersplan_040325

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Re: "or will the 600m net allow TTI pickup its share of AC for 50m?"

Now that's my kind of creative accounting! I tried that on my wife, but she didn't swallow it... Well, I wanted to spend $53g's on a truck, so if I only spend 25, that's 28 less, 28-25=3, so this one really only cost $3 grand. :S

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Must be nice when your biggest problem is being restricted in how much of your massive assets you can put into a particular asset class. Especially when the Feds may do a number on income trusts, anyway.

Income Trusts take revenue away from the Federal Government. Expect them to get plenty of scrutiny.

neo

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Guest lupin

thinking outside the box....

Sometimes we have to look at the whole picture when considering these issues Dagger.Although I am shure this repayment schedule is required by Trinity in order to make the deal work,One has to wonder what repercussions this will have on other pension funds who are also underfunded at this time.

Giving AC 10 years to repay the deficit sets a dangerous precedent for the federal goverment.From what I have read from the press(for all thats worth lol) there are alot of pension plans running deficits at this time.If everyone starts demanding the 10 year repayment plan ,it might actually make matters worst for employees working for companies who do not have successful business plans that pans out.

Lupin

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Guest sputnik

I just recieved my "annual shareholder report" from Imperial Oil. They too have a $1.3 billion dollar pension shortfall. Is OSFI pushing them to accelerate payments? I don't think so. And it doesn't matter, because Imperial Oil is not in danger of liquidation.

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