On March 5, 2009, the Supreme Court of Canada denied with costs
the plan members' application for leave to appeal from the
decision of the Federal Court of Appeal in Dana P. Cousins et
al. v. Attorney General of Canada et al., more commonly known as
the "Marine Atlantic" case.
This is a positive development for sponsors of
federally-regulated pension plans, as it means that the Federal
Court of Appeal's decision remains the law. The Federal Court
of Appeal had held that the Pension Benefits Standards Act,
1985 (Canada) (the "PBSA") does not require a
portion of the actuarial surplus in a defined benefit pension plan
to be distributed at the time of a partial termination.
In reaching its decision, the Federal Court of Appeal
distinguished the decision of the Supreme Court of Canada in
Monsanto Canada Inc. v. Ontario (Superintendent of Financial
Services) on the basis of the difference in wording between
the Ontario Pension Benefits Act (the
"PBA") and the federal legislation.
Specifically, the Court held that:
Pursuant to section 70(6) of the Ontario PBA, plan
beneficiaries affected by a partial wind up are entitled to
"rights and benefits that are not less than the rights and
benefits they would have on a full wind up of the pension plan on
the effective date of the partial wind up". "Wind
up" is defined in section 1 of the PBA to mean not
only the termination of the pension plan but also the
"distribution of the assets of the pension fund".
Correspondingly, "partial wind up" is defined to include
distribution of the assets of the pension fund related to the part
of the pension plan that is terminated.
While the federal PBSA provides that on a
"partial termination" of a pension plan the rights of
affected members "shall not be less than what they would have
been if the whole of the plan had been terminated on the same date
as the partial termination", a "termination" is not
defined to include or require the distribution of pension assets.
The federal PBSA defines "termination" and
"winding-up" separately, with only the latter including
the distribution of assets. Under the federal legislation,
therefore, "termination" and "winding-up" occur
at different times.
Accordingly, Monsanto was distinguishable, since it
was based upon differently-worded legislation that requires the
distribution of surplus on a full wind up of a pension plan and
therefore grants beneficiaries affected by a partial wind up an
equivalent right to share in a portion of any actuarial surplus
existing at the time. By contrast, members affected by a partial
termination under the federal PBSA are entitled only to
rights equivalent to those they would have on a full termination of
the plan, not on a full winding-up.
Surplus distribution on winding-up will be governed by the
terms of the relevant plan documents.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
A former teacher at Bodwell High School has learned a valuable lesson from the B.C. Human Rights Tribunal— it is not discriminatory for an employer to offer child-related benefits to only employees with children.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
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