Pension rules spark new fears at Corner Brook mill

An accounting regulation is causing concern about a possible new crisis at the Corner Brook paper mill, and creating angst about its future.

The pension plan at the Kruger mill is underfunded by tens of millions of dollars.

The province allowed the company to temporarily reduce what it contributes to the plan.

The law used to give the company five years to catch up. New legislation extends that to 10 years, if unions and pensioners agree.

However, should the mill shut down before that, the pension fund would be short and all pensions could be cut. One source tells CBC News that cut could be as much as 40 to 50 per cent.

The source says no give on pensions would leave the company in a tough financial spot, likely leading to some kind of reduction in pension payout, and well as job losses.

Unions, pensioners and the company will meet over the next few days to work out a deal.