Ontario has released a consultation paper to offer solutions to the problem of pension surplus sharing.
It is roundly accepted by both sponsors and members that wording regarding surplus distribution, and in particular at the time of a partial wind up, is unclear and needs changing. This was a large part of the problem in Monsanto’s lengthy battle in the courts over its partial wind up plan (see CHRR, April 9, 2001).
The Ministry of Finance produced the paper and said it is taking action to ensure that the Pension Benefits Act, and the surplus regulation are consistent and effective. Among the recommendations for a partial plan wind up, an employer would be permitted (but not required) to withdraw a share of surplus in proportion to the actuarial liabilities associated with the affected members on partial wind up, if it is able to secure the requisite consent of the affected members, even if the plan does not specifically entitle the employer to surplus.
The consultation paper is available at http://www.gov. on.ca/FIN/english/neweng.htm.
It is roundly accepted by both sponsors and members that wording regarding surplus distribution, and in particular at the time of a partial wind up, is unclear and needs changing. This was a large part of the problem in Monsanto’s lengthy battle in the courts over its partial wind up plan (see CHRR, April 9, 2001).
The Ministry of Finance produced the paper and said it is taking action to ensure that the Pension Benefits Act, and the surplus regulation are consistent and effective. Among the recommendations for a partial plan wind up, an employer would be permitted (but not required) to withdraw a share of surplus in proportion to the actuarial liabilities associated with the affected members on partial wind up, if it is able to secure the requisite consent of the affected members, even if the plan does not specifically entitle the employer to surplus.
The consultation paper is available at http://www.gov. on.ca/FIN/english/neweng.htm.
