Fall 2002 Report

Pension Boards - Court Ordered Retiree Representation

Recently, we were appointed by the Court of Queen's Bench to represent the interests of approximately 6,000 members of the City of Winnipeg Pension Plan including all the retirees, in response to a Court application that sought approval of fundamental changes to the structure and operation of the current Plan.

The proposed changes were the culmination of several years of negotiation between the City of Winnipeg and various Participating Unions who represented the interests of the employee members of the Plan. The Court application, filed by the City of Winnipeg as the Plan sponsor, required the Court to determine whether the proposed changes were justifiable and beneficial to each of the various classes of the Plan.

The proposed changes included the appointment of a new Board of Trustees who would manage the Plan, consisting of an equal number of Trustees appointed on behalf of the employee members of the Plan and the City of Winnipeg. Members of the retiree class opposed the new structure, in part, because it failed to provide for direct representation for retirees and other members of their class on the new Board of Trustees.

The Court approved the restructuring but only on the condition that at least one Trustee be appointed from the retiree class. In imposing this condition the Court recognized that the interests of retirees and employee Plan members may differ with respect to things such as investment strategies and program benefits and that all constituencies in the Plan should be represented in the decision making process.

While courts have previously considered retirees' rights on sharing of surplus and claims to equal treatment when benefits are enhanced for various classes of members, this case represents a growing recognition of the rights of retirees in the operation and affairs of pension plans including their participation on pension plan boards. As employees continue to retire earlier and take an active interest in the operation of pension plans, we expect that there will be more developments in the area of retiree claims, particularly where pension plans are restructured.

Our Firm has an extensive pension and benefit law practice which draws on our broad range of expertise and experience in litigation, corporate commercial law, tax law and administrative law. Our clients include pension plans, employers, unions, plan members and trustees to whom we provide advice and representation on a wide variety of matters involving pension and benefit plans, including restructuring, winding-up or amendments of plans, plan creation and implementation, plan mergers, trust agreements and agreements for administrative services, and surplus and distribution issues.