Harold Niebergall, 78, spent half of his life working in various Sears departments throughout his career. He retired in 1996 and up until now, he didn’t think his pension cheques would soon shrink.

About 16,000 thousand former employees were enrolled in the company’s defined benefit pension plan, which was short about $270 million when the company filed for bankruptcy.

As a result, the retirees are living under a looming threat that 20 per cent of their pensions will be cut.

“It’s very difficult, maybe betrayal is part of it, frustrated, concerned,” Niebergall said. “We all look forward to retirement and being able to do a lot of things, and it might be more difficult to do those things now.”

Retirees concerned about the future

Ken Eady, a spokesperson for Sears Canada Retirees Group, said members are sad and angry that steps weren’t taken to protect the workers from this dilemma.

“This wasn’t a gift. This was pension money that they put in themselves. This is deferred wages that they’re owed. And to lose it, is quite a blow,” he said.

Eady blames the owners for bleeding the company dry and taking advantage of Sears’ assets.

Since 2005,  shareholders were paid $3 billion in dividends while the pensions were underfunded.

“They saw an opportunity to take the assets --  which they did over the period that they owned it – and paid themselves in dividends, while not growing the company, not investing in the company in a reasonable way and not managing the company in a positive way,” he alleged.

Eddie Lampert fires back

Sears Holdings CEO and Chairman Eddie Lampert did not respond to CTV Edmonton for a request for comment.

He addressed some of the more controversial payouts in his blog.

On a post made this month, he said after some real estate sales in 2012 and 2013, the iconic retailer was debt free and still had $500 million, and no dividends were made after that.

Lampert blames management for the company's demise saying, “the company made certain strategic decisions that proved unwise.”

Former workers have requested the court to appoint a trustee to examine the dividend payments.  

“What we want to do is investigate it thoroughly enough to determine if litigation is possible,” Eady said.

Calls for change

An Ontario MP is calling on the federal government to reform the bankruptcy law.

NDP Pensions Critic Scott Duvall introduced a private member’s bill last fall, looking to change the layout of who gets paid when a company files for bankruptcy.

Edmonton-Strathcona MP Linda Duncan met with local Sears retirees to discuss her colleague’s bill.

“We now have a pattern in Canada, where we allow foreign ownership to take over a lot of companies. What happens is they sell off their assets and pay out major dividends to the shareholders, and in many cases they’re American shareholders, and underfund the pension fund. Increasingly, governments are allowing the underfunding of pensions,” Duncan explained.

Duncan and Duvall are hosting a town hall in at the McKernan Community League on Monday, March 5.