Victory for employers in pension fight

Kerry wins right to transfer surplus DB funds to DC
By Angela Scappatura
|Canadian HR Reporter|Last Updated: 09/04/2009

In a decision being hailed as a victory for employers, the Supreme Court of Canada has ruled in favour of a company that transferred surplus money from a defined benefit (DB) pension plan to a defined contribution (DC) plan.

The case began in 2000 after Kerry Canada, an Ontario-based food products company, closed the DB plan to new employees and created the DC option. A group of employees asked the Ontario Superintendent of Financial Services to investigate the company’s use of surplus funds from the DB plan for DC contributions.

Ontario’s Financial Services Tribunal ruled in favour of the company in 2004. That ruling was appealed and the Ontario Divisional Court sided with the employees. Kerry appealed that ruling and the Ontario Court of Appeal ruled in its favour. Employees appealed that decision and, on Aug. 7 — nearly 10 years after the initial complaint was filed — the Supreme Court ruled in favour of Kerry Canada.