Kerry (Canada) Inc. v. DCA Employees Pension Committee

This proceeding concerns the right of a pension plan administrator to pay pension plan expenses out of a pension fund, and the right of an employer to use surplus assets in the defined benefit component of a pension plan to fund the employer’s required contributions under a defined contribution component of the pension plan.

In 1985, the employer, Kerry (Canada) Inc., ceased contributing to the Pension Plan for the Employees of Kerry (Canada) Inc. (the “Plan”). From the Plan’s inception until 1984, the Plan’s expenses were paid for by the employer; however, beginning in 1985, third party expenses began to be charged to the Plan. In 2000, the Plan created a defined contribution component. All new employees were required to participate in the defined contribution component.

Members and former members were involved in proceedings before the Financial Services Tribunal of Ontario, and subsequently before the Courts of Ontario and the Supreme Court of Canada, alleging that the payment of Plan expenses out of the pension fund and the contribution holidays taken by the employer were illegal.

Koskie Minsky LLP represented members and former members of the Plan in these proceedings.

Latest Developments
- August 11, 2009
  The Supreme Court of Canada dismissed the Plan Members’ appeals in their entirety. To view the Supreme Court of Canada’s decision, please view the Documents section of this webpage.
- November 18, 2008
  The appeal of the decision of the Ontario Court of Appeal was heard by the Supreme Court of Canada. Decision on the appeal is under reserve.
- September 7, 2008
  The Ontario Court of Appeal released its judgment in respect of the costs of the appeal. The Court ordered the Plan Member Committee to pay costs in the amount of $45,000, in respect of the Divisional Court appeals, and $40,000 in respect of the appeal before the Court of Appeal.
- January 31, 2008
  Leave to appeal the decisions of the Ontario Court of Appeal to the Supreme Court of Canada was granted.
- June 5, 2007
  The Ontario Court of Appeal issued reasons in respect of the appeal by Kerry Canada of the decision of the Divisional Court, and the Plan Member Committee’s cross-appeal in respect of the same decision. The Court overturned the decision of the Divisional Court in respect of the issues of permissible Plan expenses and contribution holidays, and restored the decisions of the Financial Services Tribunal. The Court dismissed the Plan Member Committee’s cross-appeal.
- March 15, 2006
  The Ontario Divisional Court issued its reasons, allowing the Plan Member Committee’s appeal of the decisions of the Financial Services Tribunal. The Court held that the Tribunal had erred in finding that the employer was permitted to pay Plan expenses out of the Plan Fund, and that the employer was entitled to take a contribution holiday in respect of the defined contribution portion of the Plan.
- March 4, 2004
  The Financial Services Tribunal released its decision, holding that the employer was permitted to pay Plan expenses out of the Plan fund.
- January 1, 2000
  The Financial Services Tribunal released its decision, holding that the employer was not entitled to utilize pension fund surplus to fund its defined contributions under the Plan. However, the Tribunal also held that, if the Plan were amended retroactively to make members of the defined contribution component of the Plan, such payments would be permissible.
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Kerry (Canada) Inc. v. DCA Employees Pension Committee

Latest Developments

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