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1) 1928: The Royal Trust Company began
accumulating funds in 1928 for the purpose of providing a pension
plan for its full-time employees.
2) March 1, 1936: The Royal Trust
Pension Plan was formally commenced on March 1, 1936 pursuant to an
incorporating statute of the Province of Quebec (“the incorporating
statute”) assented to on March 20, 1930.
3) Subsequent to 1936: Pursuant to the
incorporating statute, a pension fund and trust was established for
the benefit of employees of Royal Trust for the following purposes
and objects:
“...to provide out of the funds of
the Society for the payment of pensions to employees and
ex-employees of the Trust Company and to widows or dependants of
deceased employees or ex-employees of the Trust Company, and
generally to promote their welfare”.
4) The incorporating statute also
provided as follows:
“All property acquired and all
revenues received from whatever source they may be derived shall
be devoted exclusively to the maintenance of the Society and the
furtherance of its objects”;
“The Society may be dissolved and
its affairs wound up if a resolution for that purpose is passed by
the board of directors and approved by a resolution passed at a
general meeting of the Society duly called for the purpose of
considering the same and also approved by a resolution passed at a
meeting of the board of directors of the Trust Company. In the
event of such resolution being passed, a liquidator or liquidators
shall be appointed by the same or a like resolution, and after the
discharge of or provision for all the debts and obligations of the
Society any surplus assets shall be devoted to such objects for
the benefit of employees or ex-employees of the Trust Company, or
the widows or dependants of such employees or ex-employees as the
board of directors may determine.”
5) December 31, 1956: On December 31,
1956, the assets of the pension fund were transferred to a successor
pension fund and administration of these assets was continued under
a successor pension plan implemented under a Trust. The provisions
of the 1956 Trust included the following:
1) “[t]he Fund shall be held by the
Trustee in trust and be dealt with in accordance with the
provisions of this agreement. At no time shall any part of the
corpus or income of the fund be used for or diverted to purposes
other than for benefits to be provided under the Plan”;
2) “[a]ny amendment to the Plan
shall not affect adversely the amounts or conditions payment of
benefits already earned and funded”;
3) no amendment was valid which
authorized or permitted, prior to satisfaction of all liabilities
to those entitled to benefits, “any part of the corpus or income
of the Fund to be used for or diverted for purposes other than for
the exclusive benefit of those entitled to benefits”;
4) “contributions already paid into
the Pension Fund will not be withdrawn by the Company but will
remain for distribution among those entitled to benefits in an
equitable manner decided upon at such time by the Retirement
Committee” upon discontinuance of the Plan; and,
5) “[t]he company will also assume
the cost of administering the Plan and the Pension Fund”.
6) June 12, 1969: On June 12, 1969, an
amended Consolidated Trust Agreement was entered into between the
Royal Trust Company in its capacity as “employer” and the Royal
Trust Company in its capacity as “trustee”, amending the 1956 Trust,
including as follows:
“All such money and property, all
investments made therewith and the proceeds thereof and all
earnings and profits thereon are referred to herein as the “Fund”.
The Fund shall be held by the Trustee in trust and be dealt with
in accordance with the provisions of this Agreement. At no time
shall any part of the corpus or income of the Fund be used for or
diverted to purposes other than for benefits to be provided under
the Plan”.
7) March 16, 1981: On March 16, 1981,
the 1956 Trust was further amended and consolidated pursuant to the
1981 Consolidated Trust Agreement between Royal Trustco Limited and
Royal Trust Corporation of Canada, effective January 1, 1981. The
following term, among others, was included and became part of the
Trust:
“The Trustee, in its discretion, may
keep such portion of the Fund in cash or cash balances as the
Trustee may from time to time deem to be in the best interests of
the Fund”.
8) Jan. 1, 1985: On January 1, 1985,
Royal Trust’s predecessor, Royal Trustco Limited, reduced the
formula for calculating pension benefits pursuant to the defined
benefit plan for each year of pensionable service from 2% to 1.25%.
Royal Trustco Limited purported to amend the formula without
complying with legal notice requirements and at a time when the Fund
was in surplus in excess of $13,000,000.
9) December 1988: By resolution on
December 8, 1988, Royal Trustco Limited purported to amend the plan
with effect from December 2, 1988 to provide that surplus monies may
anytime and from time to time be withdrawn by Royal Trustco Limited
for any purpose whatsoever.
10) July - December 1989: By
resolution on July 20, 1989, Royal Trustco Limited resolved that the
plan be terminated and wound up effective December 31, 1989 and that
any surplus be allocated to Royal Trustco Limited and purported to
add a new subsection to the plan as follows:
“With effect from December 2, 1988
surplus (as defined in the Pensions Benefits Act, 1987 (Ontario)
monies which at any time may form part of the pension fund
established with respect to the Plan and the income thereon, may
at any time and from time to time be withdrawn by the Company for
any purpose whatsoever.”
11) October 1989: On October 26, 1989,
through correspondence, the Superintendent of Pensions of the
Pension Commission of Ontario rejected Royal Trustco Limited’s
proposed notice to pension plan members concerning the plan wind-up
on the basis that, among others, the proposed notice failed to
address the pension plan members’ potential right to the entire
surplus. Royal Trustco Limited’s intention was to claim 2/3 of any
surplus and provide pension plan members with 1/3 of any surplus. As
of 1989, the surplus had grown to approximately $105,000,000.
12) February 1990: On February 13,
1990, Royal Trustco Limited replied to the Pension Commission of
Ontario regarding its rejection of the proposed notice, including as
follows:
“We do not feel that the best usage
of surplus funds is in providing increases in pension benefit
levels.”
13) February 1990: By resolution on
February 26, 1990, Royal Trustco Limited rescinded the termination
resolution referred to above, and limited membership in the plan to
those employees whose employment date with the company preceded
January 1, 1988 or who were members of the plan on December 31,
1989. The plan was amended to include the following provision:
“Notwithstanding any other provision
of this Plan, effective December 31, 1989, only an Employee who
was a Member of the Plan on December 31, 1989 shall be eligible to
be a Member of the Plan.”
14) Pursuant to the resolution and
amendment described above, membership in the plan was determined.
Only those individuals who were members on or before December 31,
1989 were eligible to receive benefits.
15) Late 80s, early 90s: In the late
1980’s and early 1990’s, Royal Trustco Limited underwent serious
financial strife. During this time frame, the share price in Royal
Trustco Limited plummeted. Accordingly, the plaintiffs lost their
job and financial security. A significant number of employees lost
their jobs during this same period of time, and Royal Trustco
Limited was substantially restructured.
16) In 1993, Royal Bank, purchased the
remnants of the former Royal Trustco Limited. Royal Trust became a
subsidiary of the Royal Bank.
17) Nov. 30, 1994: On or about
November 30, 1994, Royal Trust sent notice via memoranda to Royal
Trust employees of the intention to reopen the plan effective
January 1, 1995. No notice was provided to retired members of the
plan.
18) 1995: In or about 1995, Royal
Trust subsequently reopened the plan to individuals who were not
plan members on or before December 31, 1989.
19) Today: The surplus is now
estimated to be in excess of $150,000,000. Royal Trust no longer
makes contributions to the plan.
20) Despite repeated requests to do
so, Royal Trust has neither distributed any part of the accumulating
surplus nor significantly improved plan benefits. More than half the
assets held in the fund constitute surplus.
21) 1996, 1997: Royal Trust has paid
from the fund to RT Capital Management (a subsidiary of Royal Bank)
management fees based on the market value of net assets of the plan
at the beginning of each quarter. The amounts paid to RT Capital
Management were $402,484 for the year 1997 and $353,855 for the year
1996.
22) 1996, 1997: Royal Trust has paid
from the fund to itself custodial fees. The amounts paid to Royal
Trust were $174,191 for the year 1997 and $169,050 for the year
1996. |
