Transamerica Life Canada pleased that the rights of pensioners are upheld By Supreme Court of Canada Decision
TORONTO, July 28, 2004 – Transamerica Life Canada is very pleased with a recent Supreme Court of Canada decision to dismiss an application for appeal from ING Canada on the NN Pension Fund case. The decision was handed down on Thursday, July 8, 2004, and upheld a previous Ontario Court of Appeal decision last December, 2003.
“We are very thrilled with the Supreme Court of Canada decision,” says, George Foegele, Chairman, President and CEO, AEGON Canada, the parent company of Transamerica Life Canada. “We could not have asked for a better outcome than this. The rights of the Halifax Life pensioners have been defended and moreover, pension plan members can be confident that their pension is being administered according to its original terms.” Approximately 50 pension plan members are positively impacted by the decision.
Transamerica Life Canada acquired NN Life Insurance Company of Canada in April 2000 from ING Canada Inc. The NN Life Pension Plan included former employees of Halifax Life. ING Canada Inc. had represented to Transamerica Life Canada that the pension surplus belonged to the company. Upon investigating the Plan, after the merger, Transamerica questioned whether the surplus was an asset of the Plan or whether it belonged to former employees of Halifax Life. Transamerica Life Canada commenced a court application in January 2002 seeking an interpretation from the court. The Supreme Court has now confirmed that the Plan was not properly funded and that the provisions of a 1969 Trust Agreement, that governed former employees of Halifax Life, had not been fully recognized.
The assessment of damages owing to Transamerica Life Canada by ING Canada is approximately $7.5 million, plus interest and legal fees. These damages predominantly cover the monies Transamerica has invested into the Pension Plan to properly fund it according to its original terms, the loss of the pension surplus that Transamerica thought it acquired when it bought NN Life, as well as the incurred legal costs to bring the issue to court.
Jane Benn, a Pension Plan member, and intervenor in the court application, was ecstatic upon hearing the decision. “It’s just wonderful that we can put closure on this now,” she says. “We’re very glad that Transamerica took the initiative to take the issue to court. It’s really terrific to know that our pension interests have been protected.”
The pension fund is currently managed by AEGON Capital Management Inc., a sister company to Transamerica Life Canada, and also a member of the AEGON Group. Historically, AEGON companies have an expertise in pension fund management, having often been at the forefront of progressive pension plan developments throughout Europe and the U.S. “This important decision demonstrates that AEGON Canada’s approach to pension fund handling is in keeping with our global reputation that we will carefully administer pension plans and that we will act in the best interests of pensioners,” confirms Foegele. “The pensioners are clearly the winners,” he concludes.