Last week the Supreme Court of Canada decided against plan members in the Rogers Communications v. Buschau case saying they could not terminate their trust to access a multi-million dollar pension surplus based on the Saunders v. Vautier rule. The common law rule, from an 1841 British court decision, permits a trust to be brought to an end when all of the beneficiaries consent.
In 1980 Rogers acquired the Vancouver cable company Premier Communication and its pension plan, which had a surplus. In 1992, Rogers merged the plan with three other existing plans. Members of the former Premier Communication plan launched a lawsuit against Rogers, in part, to access the plan surplus. The British Columbia Court of Appeal previously ruled the members were entitled to use Saunders v. Vautier to close the plan and access the money.
The Supreme Court’s decision recognizes that you cannot separate the pension trust from the plan and there is a regulatory context that surrounds both said Stephanie J. Kalinowski, a partner at Hicks Morley in Toronto. “What’s good about [the ruling] is that it is putting things back into the regulatory scheme,” she says. “The concern for plan sponsors was the idea that members could come together and use common law to achieve something they may not otherwise get in a regulatory arena.”
The court stated that the members should instead apply to the B.C. Superintendent of Pensions to terminate the plan. Reports indicate the members intend to continue the 10-year fight by applying to the Superintendent to access the surplus, which was valued at $11 million in 2002.
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