Monsanto Canada Inc. v. Ontario (Superintendent of Financial Services), [2002] O.J. No. 4407 (Ont. C.A.)
Monsanto Canada was implementing a partial wind up of the pension plan it maintained for its employees. Due to a corporate reorganization and a plant closure, Monsanto had given notice of termination to 146 employees. At issue in this case was whether it had a legal obligation to distribute the actuarial surplus in the pension plan attributable to them.
Monsanto had submitted a report to the provincial pension regulator seeking approval for the partial wind up of the plan. The report did not provide for a pro rata distribution of the plan’s surplus to the workers. The superintendent gave Monsanto notice of refusal to approve the partial wind up report primarily because it did not provide for the distribution of the surplus, which was contrary to s. 70(6) of the Pension Benefits Act.
The court’s decision turned on the interpretation of this section. The court held the ordinary meaning of s. 70(6) gave employees the right to have their share of the surplus of the plan distributed at the time of partial wind up.
This interpretation was consistent with the broad purposes of the act and it was preferable from a practical perspective as it was possible to calculate the portion of the surplus attributable to the part of the plan being wound up. If the employees had to wait until there was a full wind up of the plan, it would be difficult to locate the staff entitled to share in the surplus of the plan.
Monsanto Canada was implementing a partial wind up of the pension plan it maintained for its employees. Due to a corporate reorganization and a plant closure, Monsanto had given notice of termination to 146 employees. At issue in this case was whether it had a legal obligation to distribute the actuarial surplus in the pension plan attributable to them.
Monsanto had submitted a report to the provincial pension regulator seeking approval for the partial wind up of the plan. The report did not provide for a pro rata distribution of the plan’s surplus to the workers. The superintendent gave Monsanto notice of refusal to approve the partial wind up report primarily because it did not provide for the distribution of the surplus, which was contrary to s. 70(6) of the Pension Benefits Act.
The court’s decision turned on the interpretation of this section. The court held the ordinary meaning of s. 70(6) gave employees the right to have their share of the surplus of the plan distributed at the time of partial wind up.
This interpretation was consistent with the broad purposes of the act and it was preferable from a practical perspective as it was possible to calculate the portion of the surplus attributable to the part of the plan being wound up. If the employees had to wait until there was a full wind up of the plan, it would be difficult to locate the staff entitled to share in the surplus of the plan.
