In its decision in Rogers Communications Inc. v. Buschau, the Federal Court of Appeal upheld a ruling by the federal Superintendent of Financial Institutions regarding a dispute between Rogers and a group of its employees over the right to surplus assets in a pension plan. The decision illustrates the broad deference courts give to the decisions of pension regulators. This has important practical implications for employers dealing with pension regulators as their decisions may be difficult to overturn.
The case arose when Rogers acquired Premier Communications Ltd. and its pension plan. Rogers closed the plan to new entrants, withdrew close to $1 million in surplus assets and started taking contribution holidays. In 1992, it merged the plan with four other Rogers’ pension plans. After an unsuccessful attempt to have the plan terminated by invoking an archaic legal rule from 1841, plan members applied to the Superintendent of Financial Institutions for a declaration that the plan was terminated, an order replacing Rogers as the administrator, and an order winding-up the plan and distributing the surplus assets to the members. Rogers sought to revoke the prior merger and to admit new employees of the successor to Premier Communications into the original plan. The Superintendent granted the applications to revoke the merger and to open the plan to new members. She decided that Rogers’ applications did not contravene applicable pension legislation. She further found that the pension plan had not been terminated by virtue of taking contribution holidays. Lastly, she decided not to exercise her discretion to terminate the plan.
The key issue before the Court of Appeal was what standard of review should be applied to the decisions of a pension regulator? The Court held that the appropriate standard of review, both on questions of interpretation of the Pension Benefits Standards Act and on administrative or discretionary matters is one of reasonableness and that the Superintendent is to be given deference in its decisions. In the circumstances of this case, the Court found that the Superintendent’s decisions were, in fact, reasonable.