Nortel will eliminate pension plans for current employees and move affected employees to "defined contribution" retirement plans, in which Nortel will contribute 2 percent of an employees' eligible earnings for a retirement fund. In addition, Nortel will provide a 50 percent match on employee contributions of up to 6 percent of eligible earnings, for a total maximum of 5 percent employer contribution.

Current retirees will not see any change to their pension income benefit in the U.S. and Canada, although the cost-sharing formula for medical benefits will change for some U.S. retirees.