Pension: Burke v. Hudson's Bay Co. (2010)

Previously published in BENEFITSCANDA.COM

In 1987, the Hudson's Bay Company (HBC) sold the assets of its Northern Stores Division (NSD) to the North West Company (NWC). The NWC made offers of employment to the NSD employees and agreed to provide a defined benefit plan with equivalent benefits and recognition of prior years of service. HBC transferred the plan assets attributable to the transferred employees to the NWC pension plan but did not transfer a proportionate share of the surplus. The transferred employees alleged that the pro-rata share of surplus should have been transferred as well.

The Supreme Court of Canada noted that plans may impose stricter requirements than specified by the legislation. In this case, however, the plan text expressly limited members' entitlements to their defined benefits. Although the 1984 trust agreement contained exclusive benefit and non-diversion language, the Court held that the trust agreement must be read with the