Canadian Planning For Retirement

Part 1:  Pension or Commuted Value?


Nortel Networks Corporation, formerly known as Northern Telecom Limited, Northern Electric and sometimes known simply as Nortel, was a multinational telecommunications and data networking equipment manufacturer headquartered in Mississauga, Ontario, Canada. It was founded in Montreal, Quebec in 1895 as the Northern Electric and Manufacturing Company. At its height, Nortel accounted for more than a third of the total valuation of all the companies listed on the Toronto Stock Exchange (TSX), employing 94,500 people worldwide.[3]

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Nortel’s 2009 bankruptcy case—the largest in Canadian history—left pensioners, shareholders and former employees with enormous losses while Nortel executives continued to draw “retention bonuses” totaling $190M US during the eight-year post-bankruptcy period.[4]Nortel had filed for protection from its creditors in the United States, Canada, and the United Kingdom in January 2009.[5] In June 2009, the company announced it would cease operations and sell off all of its business units.[6] The period of bankruptcy protection was extended to February 2, 2013.[7] As part of the bankruptcy proceedings in the United States, Nortel Networks Inc. publishes monthly operating reports outlining cash receipts and disbursements.[8] By 2016 Nortel had sold billions of dollars worth of assets.[4]



  1. If you choose to take the commuted value:
  2. What type of account will you set up to hold that money? (1 mark)
  3. When can you have access to the money and what is the process for doing so? (3 marks)


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