After announcing the closure of 59 stores, and dismissal of 2,900 employees at the end of June, Sears was granted temporary protection from creditors by the Ontario Superior Court. At that time, Sears also asked for permission to stop payment on health and dental benefits and pension plans for former employees and retirees
Lawyers representing former Sears employees requested the court to reinstate these benefits and pension payments until October, while the company restructures under the court’s protection. Today, Sears Canada and the lawyers for the former employees have come to a compromise, with Sears agreeing to continue paying for some health and dental benefits as well as special pension payments until the end of September.
“After whirlwind negotiations, the retirees managed to secure a settlement where the company agreed to continue health benefits and life insurance for three more months," said Andrew Hatnay, a lawyer who represents Sears Canada retirees.
According to Ken Eady, a Sears retiree that worked for the company for 30 years, retirees are "sad and angry” about the current situation. “It's difficult for them to understand why their pensions are being affected and why their benefits could be withdrawn," said Eady.
Even though compromises regarding benefits and pension payments have been made, there is still worry that moving forward the Sears Pension Plan may be terminated.
"Currently, pension benefits continue to be paid in full, there are no reductions, and we're going to be watching how this plays out over the next couple months very closely," Hatney went on to say.