But, the Manitoba Court of Appeal has overturned a lower-court ruling in January 2010 that MTS had to make a $43.3-million payment into the pension and pay interest dating back to 1997, the Winnipeg Free Press reports. Had the ruling stood, MTS might have been on the hook for about $100 million, one of the highest judgment amounts ever awarded by a Manitoba court, according to the news report.
Among other things, the unanimous ruling determined the $43.3-million surplus was technically an actuarial surplus, not an actual surplus, and so “neither the employees nor MTS has any legal entitlement to it.” The court found the surplus was properly credited to a pensions benefit adjustment account to cover cost-of-living allowances.
The Winnipeg Free Press said the dispute emanated from the decision by the Manitoba Progressive Conservative government of the day to privatize MTS by offering shares to the public in 1997. The MTS employees’ pension plan migrated from the Civil Service Superannuation Fund (CSSF) into its own stand-alone fund.
The Appeal Court ruled there was no breach of an original memorandum of agreement. The court also found the defined benefits in the new MTS employees’ pension plan were the same as the defined benefits retirees had been receiving from the CSSF.Rob Linsdell, executive director of TEAM-IFPTE Local 161, a union that represents about 1,200 white-collar workers of MTS, said his members were disappointed. According to the news report, he said lawyers representing the plaintiffs are reviewing the ruling before deciding what to do next, including possibly appealing to the Supreme Court of Canada.