![Update: Pension mistake costs retirees $5 million](https://www.benefitscanada.com/wp-content/uploads/sites/7/2010/12/piggybank-lawbook-gavel-e1476218491186.jpg)
Updated: 10:30 a.m., Friday, Nov.30.
A former worker at the NewPage Port Hawkesbury paper mill in Cape Breton says about 250 people have been hit with a $5-million bill because of a mistake made in the calculation of their pensions.
Harvey Warner, who retired in 2006 and serves on a committee for the mill’s pensioners, says he’s on the hook to pay back $32,843 to the current administrator of the pension plan. His plight was raised by members of the Nova Scotia legislature’s public accounts committee during a hearing on Wednesday, November 28.
Morneau Shepell, the current pension plan administrator, sent letters to the pensioners this week, saying a previous plan administrator (Aon Hewitt) made a calculation error when figuring out payments.
Nova Scotia’s superintendent of pensions told the committee she has no authority to fix the mistake. Nancy MacNeill Smith says it is up to the pension plan’s current administrator to go after the previous administrator to recover the money. MacNeill Smith says her office does not have oversight of individual benefits and only ensures that the structure of pension plans follows provincial regulations.
“They made an error. We are required to pay,” pensioner Blair Samson told CBC.ca.
Rosa Damonte, senior director of communications for Aon Hewitt in Canada says, “We are deeply concerned that New Page retirees were notified of this issue in a manner that may have caused them distress. Aon Hewitt is dealing with this important matter directly with the current plan administrator, and to date no conclusions have been reached. We take this matter very seriously, and are working to resolve it in a professional manner. Given the sensitivity of this issue, we are unable to make any further statements.”
Because the plan was underfunded, his pension is 34% less than anticipated and has been told he owes $18,000 because of the miscalculation. “They’re saying we were overpaid—that Aon Hewitt, which was the first administrator, had erred and that we were overpaid,” he said. “Some people were overpaid as much as $60,000.”
– with files from Canadian Press and CBC.ca