Pensions - Articles - Nortel pension scheme – settlement announced

 The agreement is subject to creditor approval in the US and Canada and also to Court sanction in the US, Canada and various other jurisdictions, including the UK.

 In May 2015, judges in the US and Canada issued a ground-breaking decision to allocate the residual assets on a pro rata basis, as argued by the Nortel UK pension Scheme. This was an unprecedented result. The Canadian court denied leave to appeal the allocation decision and, despite an appeal process commencing in the US, negotiations continued and an agreement was reached.

 The exact amount being returned to pensioners is not known at this stage due, among other things, to ongoing non-litigation activity in Canada and Europe.

 Jonathon Land, head of PwC’s pensions credit advisory practice and adviser to Nortel’s trustees said: "An agreement is very welcome, and brings nearer the day when distributions might be made to creditors, including the Trustee of Nortel's UK pension scheme.

 “The Trustee directors have acted with great professional integrity seeking to achieve the best possible deal for their members.

 “This case will impact how pension scheme creditors are treated for years to come. Groups increasingly operate across geographical and legal boundaries and pension scheme creditors must ensure that they really understand where their legal support comes from."