Re Amcor Packaging: Court Corrects Plan Amendment Made In Error

After finding that an erroneous amendment to its pension plan had the unintended effect of increasing benefits payable under the plan to deferred vested members who elected to retire before their normal retirement date, Amcor Packaging Canada, Inc. (Amcor) successfully applied to the Ontario Superior Court to have the plan text corrected.

Background

In an effort to contain costs and minimize its long term financial risks, Amcor amended its hourly and salaried plans, which were both defined benefit (DB) plans, to close the DB component of both plans to new hires and to add a new defined contribution component to each plan for new hires. Restatements of the plans as of January 1, 2005 were drafted by the plans' actuary (with input from Amcor) and filed with the regulatory authorities. None of these documents reflected an intention to otherwise amend the benefit formula in the DB component of the plans.