A 67-year-old retired pulp mill worker has launched a class action suit in BC Supreme Court that challenges reductions in his pension plan – a result of Pope & Talbot Ltd. going bankrupt.
Named in Donald Stewart’s claim are Alan Clark, retired superintendent of pensions for B.C.; the Financial Institutions Commission for BC (FICOM); BC’s attorney general; the province of B.C.; and Morneau Sheppell Inc.
Stewart was an employee at Harmac Pacific Ltd.’s Nanaimo pulp mill from 1968 to 2004. Prior to his retirement, Pope & Talbot bought the mill and merged the two companies’ pension plans.
Upon his retirement, Stewart began collecting benefits under the merged plan. Stewart alleges that in 2008, Clark ordered representatives of Morneau to distribute plan assets on a pro rata basis to retirees, rather than the priority basis identified in the plan in the event of under-funding or bankruptcy.
In 2008, Pope & Talbot filed for bankruptcy. As a result, the retired members’ pensions were reduced by 32.2%.
Stewart claims his pension has been reduced to $1,800 from $2,658 per month. He estimates his future loss at $185,000.
Stewart is seeking damages and an accounting and distribution to be undertaken by Morneau of the approximately $7.5 million of plan funds that have been withheld from the retired members of Harmac.
For more on legal protection for employee retirement plans, see "The push for pension protection" in this week's issue of Business in Vancouver.
Jennifer Harrison
@JHarrisonBIV