The Supreme Court of Canada ruled that Kerry (Canada) Inc., Woodstock, Ontario, can use surplus defined benefit plan assets to cover the plan’s administrative costs and pay contributions to its defined contribution plan.
Participants in Kerry’s defined benefit plan sued the company after it used plan assets to pay administrative costs and covered contributions to the DC plan. (Sizes of the plans could not be learned by press time.) The Ontario Court of Appeal ruled in favor of Kerry in 2007.
The Supreme Court, in its Aug. 7 ruling, said that because the trust consisted of both defined benefit and defined contribution components, “members of both parts of the plan therefore would be beneficiaries of the trust and use of funds in the trust to benefit either part would be allowed because the trust explicitly provides that the funds can be used for the benefit of the beneficiaries.”
