Pensions @ Gowlings - October 13, 2010

Edited by Daniel Hayhurst

Contents

• Asset Transfers, Plan Expenses and Fiduciary Duties
• Changes to Canadian Pension Investment Rules

Asset Transfers, Plan Expenses and Fiduciary Duties
By Paul Dempsey and Dan Hayhurst

On October 7, 2010 the Supreme Court of Canada released its unanimous decision in Burke v. Hudson's Bay Co. The decision relates to the sale by the Hudson's Bay Company ("HBC") of its Northern Stores Division to the North West Company ("NWC") in 1987. In conjunction with this transaction, some 1,200 employees were transferred from HBC to NWC, and the parties agreed that NWC would provide a new pension plan that would provide these employees with benefits at least equal to those provided to them under the HBC plan. HBC agreed to transfer monies from its plan to the NWC plan sufficient to fund the defined benefits, but did not transfer any of the surplus assets in the HBC plan. This was the principal issue before the