05/04/2012 08:46 EDT | Updated 07/04/2012 05:12 EDT

Nova Scotia premier says legislation coming to delay windup of NewPage pension

HALIFAX - Government help is on the way to delay the windup of underfunded pension plans for workers at the former NewPage Port Hawkesbury paper mill, Nova Scotia Premier Darrell Dexter said Friday.

Dexter said his government has decided to table legislation during this session after he discussed the situation with unionized and non-unionized employees at the Cape Breton mill, which shut down last year.

He said the government the idea is under "speedy consideration," but he couldn't say exactly when the legislation would be tabled.

"They need to have some certainty," Dexter said. "It doesn't make sense to delay the implementation."

He said delaying the windup could help pensioners because the value of the plan could increase if the stock market recovers over time. However, he also cautioned that the pensioners are at the mercy of the markets and legislation is no guarantee that things will improve.

"Everybody assumes that at some point in time (the market) will go back to what has been its historical pattern, but there is no guarantee of that."

He said there are various options the government is considering, but he didn't want to be specific.

"You want to be very careful with this because you are talking about people's livelihoods, so you want to make sure you have the best possible options in place and that's what we are trying to determine."

He said whatever is done would involve no costs for taxpayers.

Prospective mill buyer Pacific West Commercial Corp. has said it doesn't want to take over the defined benefit plans for the workers.

Members of the Communications, Energy and Paperworkers Union Local 972 met with the pension actuary in Port Hawkesbury on Thursday to discuss their options and decided to call on the government for legislative help.

The union was told the three plans for unionized workers employed in woodlands, clerical and the mill are undervalued by a total of $115 million and that workers and pensioners could take a hit if the plan were to wind up now with interest rates at a 50-year low.

Union vice-president Archie MacLachlan said an immediate windup would see pensioners receive about 65 cents on every dollar, while a delay could boost that to around 70 cents if markets recover.

Progressive Conservative Leader Jamie Baillie said he supported the government's move. He said without the legislation, workers would be forced to buy annuities at a low point in the market.

"They would take pension haircuts in the 30 per cent range and nobody wants that," Baillie said.

Liberal member Michel Samson, whose riding is home to the mill, said the government should make the legislation a priority with time winding down at the legislature.

But he cautioned against a "rush job" and said proper deliberations should be followed.

"When you look at the financial implications involved here, none of us want to see this bill not achieve what is being asked for," said Samson.

The money-losing mill in Point Tupper, N.S., was closed last September, throwing 600 employees out of work, and affecting another 400 forestry contractors. It was shut down after struggling with soaring fuel and electricity costs, a strong Canadian dollar and declining demand.

It is under creditor protection until the end of this month.

The government has offered up to $30 million to support forestry operations and keep the mill in a so-called hot-idle state so it could be quickly restarted.