The Toronto Star is reporting that the Ontario government now intends to give retirees of Nortel the choice to opt out of a windup plan for their pension and enlist private financial institutions or banks to manage what amounts to $2.5 billion in funds.

Finance Minister Dwight Duncan sent a letter to the group representing ex Nortel employees outlining the province’s plan to introduce legislative amendments that would, “if passed,” give Nortel pensioners a choice to invest in life income funds.

The Nortel Retirees and former employees Protection Canada (NRPC) has been rallying against a proposal that would bind pensioners to a plan to wind up the underfunded pension and turn it into annuities, a practice used to guarantee steady payments to workers of bankrupt companies.