Employers lose pension battle

Long-awaited Monsanto decision says pension surplus must be paid out at partial windup. Critics fear viability of DB plans at stake
By David Brown
|Canadian HR Reporter|Last Updated: 09/13/2004

The Supreme Court has answered an important question about pension surplus ownership, but in the process raised the possibility of many new court cases as employers and workers fight for their share of pension surplus.

The court ruled in late July that Ontario employees affected by a partial pension plan windup are entitled to some share of any surplus that existed at the time of the windup. The decision could encourage former plan members from other defined benefit pension plans to make similar claims costing employers millions in payouts.

Since 1998 Monsanto Canada had been trying to wind up a portion of its pension plan after going through a reorganization and laying off 146 employees. The windup proposal was rejected by the Superintendent of Financial Services because it did not pay laid off employees a share of the $19.1 million actuarial pension surplus that existed at the time.