An Ontario court has turned down an attempt to block a pension asset transfer, ruling that a recent Supreme Court of Canada ruling does not apply to the facts in this case.

The case, heard before the Ontario Superior Court of Justice, Divisional Court, involved members of the pension plans of National Steel Car Ltd. (NSC).

In 2000, NSC advised the plan members that it had decided to merge two separate plans retroactively to March 1, 1999. The notice stated that the merger would not affect the pension benefits earned to date in any way, nor would it affect the way in which benefits would be earned in the future.

An application to allow an asset transfer was filed with the Office of the Superintendent of Financial Services in 2000. In 2001, the OSFI consented to the transfer. The plan members then sought a review of that decision before the Financial Services Tribunal. The tribunal rejected their argument.

On hearing the appeal, the divisional court said the recent decision of the Ontario Court of Appeal in Aegon Canada Inc. v. ING Canada Inc. (and subsequent confirmation by the Supreme Court of Canada) denying an employer entitlement to cross-subsidize one pension plan using the assets of another, did not apply in this case.

“Aegon turned on specific findings that a particular plan was subject to a trust and that the terms of the trust precluded a plan merger. Neither condition applies in the present case. In Aegon, the former Pension Commission of Ontario approved an asset transfer, but imposed a condition that the trust fund be kept segregated. In the present case, the Superintendent approved the asset transfer unconditionally, and this was unanimously confirmed by the Tribunal,” the divisional court said.

The appeal was dismissed.