Local Tech Wire

RESEARCH TRIANGLE PARK, N.C. – is terminating retirement, long-term disability and other benefits to U.S. employees as of Aug. 31.

Ricardo Miller, a spokesperson for the bankrupt telecommunications gear firm, also said it is terminating people who have been on long-term disability, noting “there are no jobs to return to.”

Nortel has been seeking approval from a U.S. bankruptcy court in Delaware for permission to end the benefits, which the company said were costing it $2 million a month.

“When Nortel filed for bankruptcy protection almost 18 months ago, we began the difficult process of reviewing our various benefit programs in light of our circumstances,” Miller told WRAL.com and Local Tech Wire in an e-mail. “Despite the bankruptcy, U.S. retiree and long-term disability benefits were continued for some time at significant expense.

“Now that we have sold the majority of our operating businesses and are preparing for completion of the restructuring, we must discontinue these benefits.”

Some 4,000 retirees and 280 people on long-term disability are affected.

According to Miller, as of Aug. 31, Nortel will:
• “Cease to provide employer-sponsored retiree medical benefits

• “Discontinue the retiree life insurance plan and the optional long-term care plan

• “Discontinue the long-term disability plan and cease payments to individuals on long-term disability

• “Terminate the employment of people on long-term disability – since with most of our divisions sold and only a small transition support staff in place there are no jobs for people to return to”

Nortel is working with United Healthcare to “transition” the former workers to another private sector provider.

“Nortel recognizes that it may be difficult for individuals to obtain alternate medical coverage,” Miller explained. “To ease the transition from an employer-sponsored plan, we have arranged for most of the individuals affected to gain access to options not readily available on the open market for individual health insurance.”

Nortel, which once employed some 8,000 people at a campus in Research Triangle Park, has liquidated most of its assets in recent months under court-monitored bankruptcy proceedings in Delaware and Canada.

Some former Nortel employees and operations in the Triangle have been taken over by other companies, including Avaya and Genband.

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