OTTAWA — A top labour lawyer is calling for government action to protect pensions in the wake of a Supreme Court ruling that it was OK for a company to move pension plan money.
The high court ruled Friday that Kerry Canada Inc. could transfer surplus cash from its defined-benefit pension plan to meet its obligations under a newer defined-contribution plan.
The high court also concluded that the food company can pay its pension fund’s “reasonable” administration costs from pension money.
The verdict could have implications for other companies that shift money between pension funds.
It also bolsters a call this week by Canada’s premiers for a national summit on pensions, said Steven Barrett of the Toronto-based law firm Sack Goldblatt Mitchell.
“If anything, I think it reinforces the call for government and legislative action to enhance the pension plans of workers who are facing retirement with either pension plans that have been seriously eroded over the last year or so or workers who simply have no, or inadequate, pension coverage,” said Barrett, who intervened in the case on behalf of the Canadian Labour Congress.
“(The court) in fact says it is up to legislatures and governments to develop pension plans that protect workers.”
At their meeting in Regina this week, the premiers jointly called on the federal government to hold a national gathering to find ways to assist Canadians who are facing retirement without adequate income.
Ontario Premier Dalton McGuinty cited a recent study that showed that, by 2030, two-thirds of Canadians will not have enough retirement income to pay for their necessary living expenses.
The Kerry Canada case pitted the company against some of its current and former employees and had been closely watched by business, unions and the pension industry.
It stemmed from 1985, when Kerry began paying administrative costs for the pension plan from the pension itself, and then took a contribution holiday.
Then, in 2000, the company amended its plan, closing its defined benefit plan to new employees, and creating a defined contribution plan.