Nortel Networks Corp. says it has reached a deal with its pensioners and employees on long-term disability.

Under the deal, which requires court approval, Nortel will continue to administer its negotiated pension plan and its managerial and non-negotiated pension plan until the end of September when a new administrator will be appointed.

The company will also continue to make the current service and special payments it has been paying through March 31.

Nortel, once part of Bell Canada and a one-time large employer as Northern Telecom in Ottawa, will pay income benefits to beneficiaries and to those receiving survivor income benefits until Dec. 31.

The deal came as the Ontario government said yesterday it will pay into its Pension Benefits Guarantee Fund so Nortel pensioners will be able to receive up to $1,000 per month.

It's up to voters to decide whether the Ontario Liberals are trying to buy votes in an upcoming Ottawa byelection by providing an estimated $200 million to help the pensioners, Premier Dalton McGuinty said yesterday.

His government has an "obligation" to Nortel workers who put so many years into the now insolvent company, he stated.