Sears Retirees Wait to Learn Fate of Their Pensions and Wonder Where the Money Went

[MULTIZ321]

Sears Retirees Wait to Learn Fate of Their Pensions and Wonder Where the Money Went
By Sophia Harris/ CBC News/ Business/ cbc.ca

"Sears Canada retirees are still waiting to learn the fate of their pensions. Many are also still struggling to understand how it got to this point.

"I accepted it, but now I'm back in the anger stage again," said Gail McClelland, who worked in furniture sales in Calgary for most of her 33-year career with Sears.

The retailer closed its doors last month, leaving behind an underfunded pension plan. About 16,000 ex-employees are bracing for a reduction in their pensions sometime this year, estimated at 19 per cent by the Sears Canada Retiree Group (SCRG), a volunteer organization representing retirees.

After Lampert took control of Sears Canada in 2005, billions were paid out in dividends to shareholders like himself, while the retailer struggled for survival.

"They couldn't afford to [top up the pension fund], but they could pay out dividends," McClelland said.

However, Lampert said the critics have it all wrong. In a lengthy statement to CBC News which he also posted in a blog, he said that Sears Canada met its demise not because of big dividend payments, but due to bad moves made by management.

"I'm just going to have to cut back and I mean, that's what you worked your life for, and now it's compromised," said McClelland, a 68-year-old widow.

Some retirees, like McClelland, blame much of their fate on Sears Canada's largest shareholder, Eddie Lampert, CEO of U.S. hedge fund, ESL Investments....."

Following a series of liquidation sales, Sears Canada closed its doors to the public in January. (Evan Mitsui/CBC)


Richard

 

[CanuckTravlr]

A pox on the Eddie Lamperts of this world. There are some good hedge funds out there, but so many are like blood-sucking vampires looking for their next victim. They recover their investment through methods, such as over-inflated dividends, that couldn't possibly be justified by normal business practices. They then blame the corpse for not having enough blood to sustain itself!!

While many department stores on both sides of the border are struggling to compete in the day of online purchases, they still had a potential niche to fill. The hedge funds robbed them of the capital required to do so. The Robert Simpson Company and its successors, Simpsons-Sears and ultimately Sears Canada, had a long, proud history in Canada for over a century, but are now relegated to the dust bin. Its employees and pensioners are left holding the bag, while Lampert and his ilk walk away enriched. A real shame. And I am a business owner, but most hedge funds bear very little resemblance to actual businesses.

 

[bizaro86]

While it probably doesn't help any, Lampert hasn't been enriched by his Sears investment.

He was very rich before (he has a yacht named after an ayn rand book), but Sears has basically destroyed his hedge fund and his reputation.

 

[cd5]

While it probably doesn't help any, Lampert hasn't been enriched by his Sears investment.

He was very rich before (he has a yacht named after an ayn rand book), but Sears has basically destroyed his hedge fund and his reputation.

Sears US and Kmart perhaps. Sears Canada was in excellent financial position (unlike the US stores) and still operated a profitable catalog & online business that should have been developed rather than being choked of funds and left to die. Here's an excellent analysis which has been validated by former head office executives who had knowledge of what was going in.
Sears Canada's death by dividends
https://www.linkedin.com/pulse/sears-canadas-death-dividends-lynne-everatt

 

[moonstone]

A good friend and neighbour of ours worked for Sears Canada for 43 years before retiring just over a year ago. He had heard rumblings of financial trouble in the months leading up to his retirement date. When he was discussing his pension options with a financial advisor they recommended that he take the lump sum pension option that Sears was offering & invest it. He did that and is really glad he did. He lost all of his pension health benefits but his wife (who has 2 yrs to retirement) has great benefits that will continue during retirement which will cover Bob as well.

It just makes him sick that the executives got so much money and the guys he worked with that stayed until the end (not much choice) got pretty much nothing. It is almost the same scenario as what happened to Northern Electric / Nortel many years ago. A friend of my dad's retired (forcefully when the company folded) with over 40 years of service and hasn't received a penny yet. As well all the company shares/stocks that employees and others contributed to the purchase of are worthless. So sad!


~Diane

 

[bizaro86]

Sears US and Kmart perhaps. Sears Canada was in excellent financial position (unlike the US stores) and still operated a profitable catalog & online business that should have been developed rather than being choked of funds and left to die. Here's an excellent analysis which has been validated by former head office executives who had knowledge of what was going in.
Sears Canada's death by dividends
https://www.linkedin.com/pulse/sears-canadas-death-dividends-lynne-everatt

I didn't say he did a good job, I said he lost money that is objectively true. His strategy was awful, and most of his investors have fled his hedge fund.