Case Summary: Halliburton Group Canada Inc. v. Alberta

The Alberta Court of Appeal recently rendered a decision that will be of interest to pension plan sponsors who are considering converting their registered pension plans from defined benefit to defined contribution. In Halliburton Group Canada Inc. v. Alberta, the Alberta Court of Appeal considered whether the plan sponsor could freeze earnings at the date of plan conversion for the purposes of calculating a defined benefit amount at retirement.

Background

Halliburton sponsors several pension plans registered in Alberta under the Employment Pension Plans Act (Alberta) (EPPA). Effective January 1, 2002, Halliburton amended its final average-earnings defined benefit (DB) plan to convert it to a defined contribution (DC) plan. As part of the amendment, the benefits accrued under the DB component were preserved, but salary and service were frozen as of the date of the conversion amendment for the purposes of calculating a final DB amount.