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Monsanto Canada Inc.
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To: Former employees of Monsanto
Canada Inc. ("Monsanto") whose employment were terminated between April 30,
1997 and December 31, 1998 in connection with the partial wind up of the
Pension Plan effective May 31, 1997 and the closure of the Searle Canada
manufacturing unit and a corporate re-organization (the "partial wind up
group") and who were employed in Ontario or Manitoba (the "surplus distribution
group").
UPDATE
We are pleased to report that Pfizer Canada approved the settlement in July
2006. Accordingly, payments will be issued to eligible individuals beginning in
October 2006. These payments will be in accordance with each individual's
regular pension payments.
BACKGROUND
On July 29, 2004, the Supreme Court of Canada released its decision in
Monsanto Canada Inc. v. Superintendent of Financial Services and
awarded 146 employees the right to share in approximately $3 Million in pension
fund surplus. Mark
Zigler and Ari
Kaplan of Koskie
Minsky's Pension & Benefits Group appeared before the Supreme Court
of Canada on behalf of the affected Monsanto employees as well as former
employees of National Trust who are seeking a distribution of a portion of that
plan's surplus when it is partially wound up.
During 1997 and 1998, Monsanto Canada Inc. terminated 146 employees and, as a
result, declared a partial wind up of the company pension plan. At the time of
the partial wind up, the pension plan had a surplus of over $19 Million.
Approximately $3 Million of this was attributable to the 146 terminated
employees.
Monsanto filed a partial wind-up report with the Ontario pension regulator in
which the company proposed to proceed with a partial wind-up without
distributing any part of the surplus that existed in the pension plan at that
time. The Superintendent of Financial Services refused to approve the report
for a number of reasons, but primarily because it did not provide for the
distribution of surplus to the 146 terminated employees.
Monsanto appealed the Superintendent's decision to the Financial Services
Tribunal which, in turn, ordered the Superintendent to approve the partial wind
up report as originally filed. The Tribunal determined that subsection 70(6) of
the Pension Benefits Act (Ontario) did not require Monsanto to distribute
surplus on the partial wind-up of the plan.
The Superintendent appealed the Tribunal's decision to the Divisional Court,
where Koskie Minsky LLP represented the interests of the National Trust
Employees. The Divisional Court agreed with the Superintendent and set aside
the Tribunal's order.
Monsanto appealed to the Ontario Court of Appeal, which upheld the Divisional
Court's decision and found that surplus had to be distributed on the partial
wind-up of a pension plan. Koskie Minsky LLP continued to successfully
represent the interests of our clients at the Ontario Court of Appeal and
Monsanto appealed further to the Supreme Court of Canada.
The issue before the Supreme Court was whether section 70(6) of the Pension
Benefits Act (Ontario) required surplus to be distributed on a partial plan
wind up. In a unanimous decision, the Court confirmed that:
"As part of the legislature's statutory structure that aims to accommodate the
interests of ongoing and terminated employees, it enacted s. 70(6) to require
actual distribution of the pro rata share of actuarial surplus on plan wind up,
be it full or partial."
The Monsanto decision has immediate implications for former members of Ontario
registered pension plans in which (a) a partial wind-up has been declared and
approved without addressing the issue of surplus in the plan at the time of the
partial wind up; (b) a partial wind-up is pending, and the plan is in a surplus
position; and (c) a re-organization, plant closure or other event has occurred
and no partial wind-up has been declared or ordered.
As a result of the decision, employees who have been, or should have been,
affected by a partial wind up of an Ontario registered pension plan that had
surplus assets at the time of the partial wind up of the plan may be entitled
to a share of those surplus assets.
A FSCO spokesperson has indicated that the regulator will be asking
administrators whether the surplus that existed at the time of the partial
wind-up has diminished and will be developing a process for what should be done
if the surplus has diminished.
On May 9, 2006 an Information Package was sent to eligible members of the
Pension Plan for Employees of Monsanto Canada Inc. (now called the Pension Plan
for Searle & Company Canada Inc. Employees) Pension Benefits Act (Ontario)
Registration Number 341230 (the "Pension Plan").
The material in the package described a proposed distribution of surplus funds
from the Pension Plan. Members were being asked to consider the proposal
described in this Information Package.
This advisory has been developed to provide general information only. It is not
intended to provide any advice as to individual rights or entitlements. Do not
rely upon the information provided on this website as legal advice in respect
of your individual.
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