With that ruling, judges of the Ontario Court of Appeal threw out a lower court decision mandating Hudson’s Bay to move a share of a $94-million surplus to a plan created for the Northern Stores Division it sold in 1987, Business Insurance reported.
According to the news report, the sale agreement called for the new company to employ 1,200 Hudson’s Bay workers and to set up a comparable pension program to Hudson’s. The Toronto retailer agreed it would move cash assets sufficient to fund the pension liabilities of the transferred employees, but to carry no further pension obligations beyond that.
The lower court ruled that some of the transferred employees had an expectation based on documents given them by Hudson’s Bay that their pensions would be improved with any surplus assets, the news report said . The lower court judge decided the failure to transfer surplus assets to the new plan constituted a breach of trust.
However, the appellate judges ruled that Hudson's Bay was under no such obligation to give up any of the surplus under the terms of its pension agreement or any law calling for such transfers.
The ruling is available here .
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