Financial Services Tribunal & Pension Commission of Ontario Case Summaries/
Summaires des dcisions du Tribunal des services financiers et de la Commission des rgimes de retraite de l'Ontario

Case Name/nom du dossier:Ferro Industrial Products Limited - XDEC-32

Type/type:Pensions/Rgime de retraite

Decision Date/Date de la dcision:95-12-19

Tribunal/tribunal:PCO/CRRO




Franais

Ferro Industrial Products Limited

Index No.: XDEC-32

Date of decision: December 19, 1995

Panel members: Eileen E. Gillese, Chair, Monica J. Townson, Darcie L. Beggs, C.S. (Kit) Moore, Joyce A. Stephenson

Parties to hearing: Ferro Industrial Products Limited
A Group of Former Annuitized Members

SUBJECT: SURPLUS WITHDRAWAL
CONSENT REQUIREMENTS
ANNUITANTS EXCLUDED
AMENDMENT POWERS

Summary:

Ferro Industrial Products Limited ("Ferro") applied to the Pension Commission of Ontario for consent to a payment of surplus in the amount of $2,104,134. as at December 31, 1992 plus investment earnings theron to the date of payment.

The application was made pursuant to a surplus sharing agreement whereby approximately 25 per cent of the surplus ($695,604) as of the effective date of the wind up would be distributed to the members, former members and other persons entitled to benefits as of the effective date of the wind up and partial wind up.

The application was opposed by a group of 21 former employees (the “annuitants”) of Ferro who were not included in the surplus sharing consent group.

It was held that Ferro satisfied the Regulations requiring the agreement of a sufficient number of former members and other persons entitled to payment under the pension plan on the date of wind up.

Further, it was held that Ferro also met the requirements of subsection 79(3) of the PBA because the trust established by Ferro to secure the pension plan assets in 1945 was terminated in 1961 through an exercise of its power of revocation that was expressly conferred on it by the trust agreement.

From 1961 the provision of pension benefits was through a contract that contained an unrestricted right of amendment which empowered Ferro to amend the plan to provide for surplus reversion to it. The Commission also found that there was no reason to review the surplus allocation formula, which had already been given Superintendent approval.

The Commission consented to the payment of surplus to Ferro in the amounts requested, consent not to be effective until the applicant satisfies the Commission that all benefits, benefit enhancements including enhancements pursuant to the surplus sharing agreement and any other payments to which members, former members and any other persons who are entitled have been paid, purchased or otherwise provided for to the satisfaction of the Commission.

The Commission held that the annuitants were not entitled to be included in the surplus sharing group, although a former member who was annuitized shortly before the wind up date was likely entitled to be included.

Cases referred to:

Saunders v. Vautier (1841), 4 Beav. 115
Joy Technologies Canada v. Montreal Trust Company of Canada (unreported) (Ont. Ct. of Justice, General Division), No. 196/91, April 7, 1995
Schmidt v. Air Products (1994), 115 D.L.R. (4th) 631


This summary is offered as a public service and should not be relied upon as legal advice. Many factors unknown to us may affect the applicability of any statement or comment made in the summary to your particular circumstances.

Ferro Industrial Products Limited

Numro d’index : XDEC-32

Date de la dcision : Le 19 dcembre 1995

Groupes d’experts : Eileen E. Gillese, prsidente, Monica J. Townson, Darcie L. Beggs, C.S. (Kit) Moore, Joyce A. Stephenson

Parties B l’audience : Ferro Industrial Products Limited
Groupe d’anciens participants rentiers

OBJET : RETRAIT DU SURPLUS
EXIGENCES EN MATIORE DE CONSENTEMENT
EXCLUSION DES RENTIERS
POUVOIRS DE MODIFICATION

Sommaire :

Ferro Industrial Products Limited ( Ferro ) a demand B la Commission des rgimes de retraite de l’Ontario de consentir au paiement du surplus de 2 104 134 $ en date du 31 dcembre 1992 et du revenu de placement accumul B partir de cette date jusqu’B la date du paiement.

La demande a t faite suite B une entente de partage de l’excdent selon laquelle environ 25 p. 100 du surplus (695 604 $) B la date de prise d’effet de la liquidation seraient distribus aux participants, anciens participants et autres personnes admissibles B des prestations B la date d’entre en vigueur de la liquidation et de la liquidation partielle.

Un groupe de 21 anciens employs (les rentiers ) de Ferro exclus du groupe qui avait consenti au partage du surplus se sont opposs B la demande.

Il a t tabli que Ferro respectait le rPglement exigeant l’accord d’un nombre suffisant d’anciens participants et autres personnes admissibles B un paiement aux termes du rgime de retraite B la date de liquidation.

De plus, il a t tabli que Ferro avait respect les exigences du paragraphe 79(3) de la Loi sur les rgimes de retraite parce que la socit avait mis fin B la fiducie tablie en 1945 pour protger l’actif du rgime en 1961 en exerant le pouvoir de rvocation qui lui avait expressment t confr par l’entente de fiducie.

A compter de 1961, les prestations de retraite ont t verses par l’entremise d’un contrat renfermant un droit d’amendement absolu autorisant Ferro B modifier le plan pour s’accorder un versement du surplus. La Commission a galement tabli qu’il n’y avait aucun motif de rviser la formule d’allocation de l’excdent, qui avait t approuve par le Surintendant.

La Commission a consenti au paiement B Ferro des sommes excdentaires rclames, prcisant que le consentement entrerait en vigueur aprPs que Ferro aurait convaincu la Commission que toutes les prestations, prestations amliores (y compris les amliorations aux termes de l’entente de partage) et autres paiements auxquels avaient droit les participants, anciens participants et toute autre personne admissible avaient t pays, achets ou autrement stipuls B la satisfaction de la Commission.

La Commission a conclu que les rentiers n’taient pas autoriss B faire partie du groupe qui avait consenti au partage du surplus, mais un ancien participant qui avait transform sa pension en rente peu avant la date de liquidation serait probablement inclus.

Jurisprudence :
Saunders v. Vautier (1841), 4 Beav. 115
Joy Technologies Canada v. Montreal Trust Company of Canada (non publi) (Cour de justice de l’Ontario, Division gnrale), no 196/91, 7 avril 1995
Schmidt v. Air Products (1994), 115 D.L.R. (4th) 631

Ce sommaire est offert B titre de service public et ne saurait constituer des avis juridiques. Nombreux sont les facteurs que nous ignorons et qui peuvent avoir une incidence sur l’application de nos commentaires B votre cas particulier.