Premier Darrell Dexter promised last week that the government would change legislation in order to help workers and pensioners avoid an immediate windup hit of up to 30 per cent or more on their pensions.
That was the prospect facing employees after the mill's prospective buyer, Pacific West Commercial Corp., said it didn't want to take over the defined benefit plan for workers.
Labour Minister Marilyn More said four pensions at the mill would have up to 11 years to recover from low investment returns and interest rates under the bill.
She said workers would have the right to opt in or out of the extended windup and get an annual update each year on the health of the plan.
She said there was no guarantee, however, that the market and interest rates would rebound over the extended period.
"No one knows where the markets will be at that point," Moore said in a statement.
"Overall, the markets tend to grow and we are hopeful that continues."
She said the legislation would also allow for a more aggressive investment strategy in hopes of generating a greater return on investments.
A Labour Department official said the legislation is based on a bill introduced in New Brunswick to extend the pension windup for workers at the Fraser paper mill.
Archie MacLachlan, vice-president of Local 972 of the Communications, Energy and Paperworkers Union, welcomed the legislation, saying it gives some hope to the union's membership.
"We appreciate the change in the law because if we don't get it changed, everybody would be forced to take a big hit right now."
MacLachlan said the union had asked the province for an eight-year delay.
Premier Darrell Dexter said he was satisfied the government was doing what it could with no cost to taxpayers.
The legislation "reflects some common sense, but I also think it reflects the requests that were made of the government," he said.
The union has said three of its pensions for workers employed in woodlands, clerical and the mill are undervalued by a total of $115 million and an immediate windup to the pensions would see a return of about 65 cents on every dollar.
The money-losing mill was closed last September and is under creditor protection until the end of this month.
Up to $30 million in government funding has already been offered to support forestry operations in the Port Hawkesbury area and to keep the mill in a so-called hot-idle state so operations could be quickly restarted.