Sears Canada pension cuts larger than expected
The past year has not been great for Sears Canada. Not only did they file for bankruptcy, and close their doors forever, they also were the subject of a lot of negative press. Between allegations of price fixing, missing pension funds, and questionable bonuses given to executives, the general public didn’t have the best view of the former Canadian retail giant by the end.
And while the last stores shut down their operations back in January, their troubles and less than favourable appearances in the news have been far from over. Back in June we learned that those who receive pensions from Sears Canada would see a 20% cut on their checks moving forward. Well, this week news broke that the cut will actually be 30%, effective immediately.
"People had their minds wrapped around the 20 per cent, now it's more than that," said Ken Eady, vice-president of the Sears Canada Retiree Group (SCRG), a volunteer organization representing retirees. "It's another loss for Sears pensioners.”
For some, this means receiving a check that is up to $800 less a month than before. For anyone, this would be a significant reduction, and for those on pensions and a fixed income, it is extremely problematic.
"It's terrible," said Ron Husk from Mount Pearl, Newfoundland, who worked at Sears for 35 years. On Wednesday, his monthly pension payout dropped by almost $450.
"I stayed awake at night thinking about it and I don't know what to do," said the 72-year-old former appliance salesman.
When first announced, it was said that the cut was being made to help the pension program in the long run. By cutting the payouts by 20% over the next 20 months, they can help to ensure that the fund will be sustainable in the future. However, it is doing very little to help pensioners right now.
Husk is already working, as a greeter at Home Depot. He took the job last year in anticipation of a reduced pension.
"I'd rather stay home," he said. "Anybody at 72 prefers not to work."