• Ontario Court of Appeal Exacerbates Uncertainty for Pension Plans Affected by Business Reorganizations
  • March 24, 2010 | Authors: Maria S. Doerksen; R. Andrew G. Harrison; François Morin; Bernard G. Roach
  • Law Firms: Borden Ladner Gervais LLP - Calgary Office ; Borden Ladner Gervais LLP - Toronto Office ; Borden Ladner Gervais LLP - Vancouver Office ; Borden Ladner Gervais LLP - Montreal Office ; Borden Ladner Gervais LLP - Ottawa Office
  • In a recently released decision, Hydro One Inc. v. Ontario (Financial Services Commission), the Ontario Court of Appeal reconsidered the threshold for when the Superintendent of Financial Services (the “Superintendent”) may order a partial wind-up of a pension plan pursuant to paragraph 69(1)(d) of the Pension Benefits Act (Ontario) (the “PBA”). The Court accepted a more flexible interpretation of this threshold, so that the Superintendent may, in appropriate cases, order a partial wind-up where a significant number of an identifiable subset of pension plan members are terminated as a result of a reorganization or partial discontinuance of an employer’s business. The decision exacerbates the prevailing uncertainty to employers created by business changes that result in employee terminations. Employees who are affected by such changes often request a partial wind-up from the Superintendent, as it provides additional benefits such as immediate vesting, the ability to “grow-in” to early retirement benefits, and distribution of surplus that may be accumulated in the plan.