Good morning. My name is Germain Auclair, and I have been the Vice-President of the Smurfit-Stone Retirement Committee for the last 20 years. This committee represents factories in Burlington, Matane, La Tuque and Pointe-aux-Trembles.
Everyone knows that Smurfit-Stone is protected under the Companies' Creditors Arrangement Act here in Canada, and chapter 11 of the U.S. Bankruptcy Code. Our plan covers approximately 725 active members and 900 pensioners. The plan's assets went from $214,598,000 in 2007 to $175,908,000 at the end of December 2008, an amount that does not account for the fact that the company has stopped making its contributions for past service since January 2009. A payment of $706,366 for past service is not made to the plan each month. The plan's solvency ratio was 64% on December 31, 2008. Presumably, that ratio is even lower today, considering that the company has suspended its contributions for past service.
Smurfit-Stone can declare bankruptcy and shut down the plan; the Régie des rentes du Québec also has the power to shut it down. Unlike Ontario, we have no law whatsoever to protect our pension plans, so members and pensioners would absorb a considerable loss, which would have repercussions in municipalities that are already grappling with plant and sawmill shut downs, such as in La Tuque and Matane.
As a clear illustration, based on bridge benefits, a 58-year-old pensioner would lose $12,181 if the company were to go bankrupt, and by the time that same pensioner reaches 60 years of age, he would lose $10,237 per year. Losses would be in the range of $11,000 to $12,000 per year, per pensioner. This amount of money is very significant for a pensioner who draws approximately $35,000 or $36,000 per year. Real losses for future pensioners would be approximately 32% for maintenance workers and 35% to 40% for production workers. Average losses would be about 32%.
Losses for all pensioners taken together would be approximately $5,580,000 per year, an approximate average loss of $6,488 per pensioner. It must be noted that losses would be lighter for older pensioners and much heavier for others.
In conclusion, after having explained what would happen to the pension plans for the factories in Burlington, Matane, La Tuque and Pointe-aux-Trembles, and the financial impact on our pensioners and workers, we, the workers of Smurfit-Stone, hope that a law similar to that of [Editor's Note: Inaudible] will be implemented to protect all of our pension plans. It is important to remember that, to date, governments have helped only companies and have forgotten about the workers and pensioners who are also bearing the brunt of the recession and massive layoffs.
We hope that you will take into account our comments in your future decisions, since the confidence in the system we live in is at stake.
We also wish to take a few moments to thank the member for Champlain, Jean-Yves Laforest, for inviting us to this meeting. We also wish to thank all members who agreed to give us the opportunity to explain how our pension plan works.
Thank you.