Employees may have an interest in pension plan surplus

Sutherland v. Hudson's Bay Company, 2011 ONCA 606, released this morning, considers the entitlement of employees to a pension surplus.

In Burke v. Hudson's Bay Co., [2010] 2 S.C.R. 273, the Supreme Court held that the employees had no equitable interest in surplus on plan termination and, therefore, no equitable interest in the actuarial surplus while the pension plan was ongoing. Many thought this was a general statement that employees have not interest on termination. Today's decision says the issue depends on the documentation and employees may indeed have an interest:


[79]         As I will explain, Burke is readily distinguishable from the present case because the plan documentation is materially different.  Unlike the present case, the originating pension plan documents in Burke gave the employees entitlement only to the defined pension benefits on retirement.  In the present case, as I have explained, since its inception, all of the plan assets have been held in an exclusive benefit trust in favour of the Plan members and their beneficiaries.