The Supreme Court of Canada’s recent decision in Buschau v. Rogers Communications Inc. signals a change in the Court’s approach to pension plans, according to a pension law expert.
In its decision, handed down in June, the Court noted that employers establish pension plans because it is in their interest to do so, said Kathryn Bush, a partner at Blake, Cassels & Graydon LLP. It also recognized the long-term nature of pension plans and the social goals that pension benefits serve, added Bush, who was speaking at an Association of Canadian Pension Management conference held in Toronto this morning. “This is the first time we’ve ever heard this out of a Canadian court.”
In the Buschau case, plan members sought to terminate the trust without the plan sponsor’s consent in order to access the surplus. The members argued that Saunders v. Vautier applied to the pension trust. However, the Court ruled that the statutory pension scheme could not be overridden by the rule in Saunders v. Vautier, which permits a trust to be terminated if all of the beneficiaries are adult, of full mental capacity and consent to the termination.
“The good news is that Sauders v. Vautier does not apply [to pensions]. Even better news is how the court seems to be recognizing what pensions are all about,” said Bush.
For some background information on the Buschau case click here.
To comment on this story email don.bisch@rci.rogers.com.