Employees of the telecom manufacturer Nortel Networks Corp. had counted on their company's pension plan to provide them with financial security in their golden years.

But the company's recent bankruptcy has cast a pall of uncertainty over the financial future of tens of thousands of former Nortel employees and exposed the flaws in Canada's pension protection laws and retirement security system.

Laid-off workers are in danger of losing their pensions altogether, while many retirees are facing drastic reductions in benefits—cutbacks they can't afford in today's hostile economic climate.

"We worked all our lives for this, and it's just been pulled out from underneath us," Nortel retiree Bob Dowson told the Toronto Star.

Dowson joined with thousands of other former Nortel employees on Parliament Hill last October to call on the government to protect the pensions of laid-off Nortel employees and workers at other companies facing bankruptcy.

"Those pensions and retirement benefits don't belong to the companies, they belong to (the) workers," Canadian Labour Congress President Ken Georgetti said at the rally.

The global economic downturn has exposed the holes in Canada's retirement security system, particularly its private pension portion, which has been devastated by the crash in the stock market. More than 80 percent of federally regulated pension plans are underfunded, including those of major companies like Air Canada.

"It's a ticking time bomb," said IBEW First District Vice President Phil Flemming. "A lot of workers are finding out that their pensions are at risk from bankruptcy courts and greedy creditors, which can pick a bankrupt company dry, leaving employees with nothing to show for their lifetimes of hard work."

Canada lacks the kind of pension protection laws that exist in the United States and in many European nations. Under current regulations, creditors' claims are prioritized over workers' investments during bankruptcy proceedings, meaning stock holders and banks get first dibs on corporate holdings, placing employee pension plans in jeopardy.

The CLC is calling for a national system of pension insurance to prevent private plans from going bankrupt or becoming dangerously underfunded. While the ruling Conservatives have refused to take action on the issue, the opposition Liberals and New Democrats have come out in support of some kind of federal pension insurance.

"We need the federal government to take responsibility to insure private pension plans so no worker spends his or her retirement in poverty," Flemming said.

The labour federation is also calling for a doubling of Canada Pension Plan (CPP) benefits, financed through a small increase in worker and employer premiums. "Because of its size, the CPP is highly risk tolerant and unlike private pensions, it is portable—so we need to expand it to better fit the needs of today's economy," Flemming said.

With only one in five workers covered by a private pension, beefing up the CPP is vital to strengthening the retirement security of all Canadians, Georgetti said.