This matter arose as a result of the insolvency and restructuring of Royal Oak Mines Inc. As part of the restructuring, the federal pension regulator ordered that the Royal Oak Mines Inc. Pension Plan for Yellowknife Salaried Employees (the “Plan) be wound up, and all vested and accrued benefits be paid out. After providing for payment of all benefits, a surplus remained in the Plan.
As a result, Koskie Minsky LLP was retained by a Committee of former employees of Royal Oak. The Committee was formed with a mandate of advocating for a distribution of the surplus funds, and commenced negotiations to obtain a fair and equitable share of the surplus between Royal Oak and all members of the Plan.
An agreement to share the surplus in the Plan between Plan members and Royal Oak’s interim receiver was reached in the middle of 2008. This agreement was approved by the Ontario Superior Court of Justice by Order dated June 24, 2008. In brief, the agreement provides for a sharing of surplus, net of certain expenses and the satisfaction of a claim made by the Office of the Superintendent of Financial Institutions in respect of the Royal Oak insolvency, between certain eligible Plan members (50%) and the interim receiver (50%).
Eligible members of the Plan under the settlement agreement include Plan members who, during the wind-up period of the Plan, were active employee members of the Plan, pensioners, surviving spousal pensioners, or deferred pensioners, as well as individuals whose membership in the Plan was terminated prior to the wind-up, but who received a subsequent payment from the Plan as a result of a recalculation and adjustment to the Plan.
The agreement must be approved by the federal regulator, the Office of the Superintendent of Financial Institutions, before any distribution can take place.