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This article was published 25/9/2014 (1363 days ago), so information in it may no longer be current.
Manitoba Telecom Services Inc. and its unions and retirees have unanimously agreed to a financial settlement stemming from the Supreme Court decision this year over $140 million in enhanced benefits.
The court sided with pensioners, ending a 14-year legal battle over what was initially a $43.3-million surplus in 1997 when the provincial telco — a Crown corporation at the time — was privatized in an initial public offering.
The court upheld a lower court's ruling that the money belongs to employees and retirees of the former Manitoba Telephone System.
About 9,000 pensioners are expected to benefit from the additional payments.
The agreement — subject to regulatory and court approval, which is expected following a hearing scheduled Nov. 3 — will be communicated to affected MTS defined-benefit pension plan members in the coming weeks.
The agreement will see MTS pay about $30 million of that money to its employee pension-plan members this year or early next year. The rest of the money will enter the pension fund in the coming years.
A company spokeswoman said MTS is happy to have the matter fully resolved after years of legal uncertainty.
A corporate statement made it clear the company isn't concerned about its relative ability to make the additional payments.
The statement said that as a result of its $250-million equity financing that closed in December 2013 and the company's solid cash flow, it is expected to have sufficient liquidity to satisfy all of its pension-funding obligations, including those in respect of the settlement agreement.
"As we have indicated in the past, we were entirely prepared for this scenario and will manage its financial impact while maintaining a strong balance sheet," said chief financial officer Wayne Demkey.
Bob Linsdell, a spokesman for the Telecommunication Employees Association of Manitoba said everyone in the plan will benefit — not just those who were retired in 1997.
The company worked well with the unions to come to agreement so quickly after the high court's ruling, he said.
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.