In the week since my previous post on Sears Canada, more news has come to light. While the majority shareholders in the company mull over their options, word has surfaced that the company’s pension fund may become a victim of the court-ordered restructuring.
The company announced that retirement benefits have been suspended for their employees. In addition to the loss of finances, the discontinuation of regular pension fund payout levels would likely also mean the termination of retiree health and life insurance benefits. With the pension plan currently underfunded, there is a very real chance this could occur. And you thought the loss of 59 locations, many jobs, and no termination packages was as bad as this could get?
There is something particularly despicable about robbing people of their pension benefits. The lure of a pension and financial freedom in your golden years causes many people to stay with a firm longer (sometimes much longer) than they would otherwise. That sort of employee loyalty is gained under false pretenses when you fail to protect their pensions in times of company financial strife. Sears’ problems are not the fault of their employees, but of systematic mismanagement in the C-suite. Will those men and women suffer in the same way? Probably not.
The law does not help the retirees’ case. They are considered to be the equivalent of unsecured creditors and that means their claims rank after those of banks and other secured creditors. Likely that means while they will get something, it will fall far short of the benefits they expected to receive until the end of their lives.
Such news is especially unfortunate for people this age because many are no longer in sufficient health to get a new job. This can lead to depression and anxiety woes, on top of the money concerns involved.
You will no doubt have heard by now that Sears is struggling. The retail behemoth has regularly posted losses over the past few years and things are no better for its Canadian cousin. That became all too clear last month when Sears Canada announced that it would be closing 59 locations in this country and laying off 2900 employees.
This seems inconceivable to people of a certain age. Long before the days of Walmart and Costco dominance, Eaton’s and Sears were the places for your clothing and electronics needs. These stores were such mainstays in Canadian retail, it was not uncommon for someone to start their careers at one and stay there for many years.
However, the internet has changed many things in our lives and the world of retail certainly falls into that category. Sites like Amazon not only offer lower prices, due to their lack of physical locations, but they also deliver the convenience of never having to leave your home. About the only downside is having to wait longer to get your things, versus picking them up at a store, but Amazon’s forthcoming drone fleet may well reduce that to mere minutes.
Of course, stores still have some advantages. For those of us who like to browse, they offer much to hold our attention. I don’t always know what I want to buy people as gifts; surfing around on the net always takes me longer than simply walking around a mall. Also, when it comes to clothes, I like to try them on and immediately know how they look and whether they fit properly.
However, it would seem that convenience is the primary goal for people in this busy day and age. Sears is not officially dead yet, but it has reached the life support stage. I will be sorry to see it go.
Stu pendousmat at English Wikipedia [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0) or GFDL (http://www.gnu.org/copyleft/fdl.html)], via Wikimedia Commons