Former Canadian Employees Appeal Plan Expenses Decision

September 5, 2007 ( - Former employees of food manufacturer Kerry (Canada) Inc., want to appeal a decision that said the company could use plan funds to cover plan expenses, Business Insurance reported.

The request for a Supreme Court hearing is designed to challenge a previous appeals court decision that, among other things, validated an employer’s right to make certain decisions about its pension plan.

In a 40-page opinion, the appeals court said that employers have the ability to pay administrative expenses from the pension fund and use the surplus in their defined benefit plan to fund their plan contributions.

Beginning in 1985, third party plan expenses were paid from the Kerry fund. These expenses were primarily the cost of actuarial, investment management and audit services provided to the plan, which amounted to about $850,000 of expenses from 1985 to 2002, the news report said.

The Toronto law firm representing the former Kerry employees filed the application for appeal last week. The court will likely take six to eight months to decide whether it wants to hear the case, a plaintiff’s attorney indicated.

For a full copy of the 40-page appeals court opinion go   here .

The Canadian court battle comes as the U.S. retirement services industry has been beset by controversy over 401(k) fees and participant lawsuits over the amount of such fees and their disclosure.