IN THE MATTER OF the Pension Benefits Act, R.S.O. 1990,c. P.8, as amended (the “PBA”)
AND IN THE MATTER OF a Proposal of the Superintendent of Financial Services to Make an Order under section 87 of the PBA relating to the Pension Plan for Salaried Employees of Bestfoods Canada Inc., Registration Number 0240358
Unilever Canada Inc.
160 Bloor St. East, Suite 1500
Attention: John D. Coyne
General Counsel and Corporate Secretary
Employer and Administrator
NOTICE OF PROPOSAL
I PROPOSE TO MAKE AN ORDER in respect of the Pension Plan for Salaried Employees of Bestfoods Canada Inc., Registration Number 0240358 (the “Plan”) under section 87 of the PBA, requiring the administrator of the Plan to file reports in respect of the partial wind-ups of the Plan as at April 1, 1998 and April 27, 1998 and detailed in the Reasons below, within thirty (30) days of the issuance of the Order.
- The Canada Starch Operating Company sponsored the Plan up to December 31, 1997. Effective January 1, 1998, Canada Starch Operating Company was restructured into two organizations – Bestfoods Inc. and Canada Starch Operating Company (1998) Inc. As part of the restructuring:
a) The Plan’s sponsorship was transferred to Bestfoods Inc.;
b) A plant belonging to Bestfoods Inc. was closed, affecting 15 Plan members and a partial wind-up of the Plan effective at April 1, 1998 was declared accordingly;
c) At another Bestfoods Inc. location, 7 additional Plan members were terminated and a corresponding partial wind-up was declared effective at April 27, 1998 accordingly.
The Financial Services Commission of Ontario (“FSCO”) was advised of these partial wind-ups by letters dated January 21, 1998 and February 20, 1998 from the employer’s consultants, Morneau Sobeco, Coopers & Lybrand (“Morneau”).
- Section 70 of the PBA requires the administrator of a plan that is to be wound up in whole or in part to file a wind-up report that sets out: the assets and liabilities of the pension plan; the benefits to be provided under the pension plan to members, former members and other persons; the methods of allocating and distributing the assets of the pension plan and determining the priorities for payment of benefits; and such other information as is prescribed.
- Section 29(3) of R.R.O. 1990, Reg. 909 (the “Regulation”), requires the administrator of the plan to file the wind-up report required under section 70 of the PBA within the six months following the effective date of the wind-up of the plan.
- By letter dated February 24, 1999, FSCO advised Morneau that the partial wind-up reports required to be filed under the PBA within six months of the effective date of the partial wind-ups had not been filed and requested that the report be filed within 30 days of the date of the letter.
- By letter dated March 8, 2005, FSCO advised the Manager, Pensions & Benefits at Unilever Canada Inc. (“Unilever”) that the partial wind-up reports continued to remain outstanding and required that the report be filed no later than April 17, 2005.
- On June 6, 2005, further to FSCO’s March 8, 2005 letter, Unilever wrote to FSCO requesting that the deadline for filing the partial wind-up reports be set after Unilever dealt with the January 1, 1998 asset transfer which preceded the partial wind-ups.
- On July 14, 2006, FSCO wrote to Unilever indicating that the prior asset transfer application had been approved and inquired as to the filing of the partial wind-up reports accordingly. FSCO required in that letter that the reports be submitted no later than August 25, 2006.
- Unilever responded by letter dated August 24, 2006, that a historical review of all relevant events impacting the Plan was underway and that it was “not possible” to prepare the partial wind-up reports at that time until the due diligence process was completed. Unilever requested that FSCO agree to allow Unilever to proceed on this basis, providing FSCO with regular progress reports.
- On September 12, 2006 FSCO asked that a time-frame with respect to the due diligence process be established.
- On January 29, 2007, Unilever responded to the September 12, 2006 FSCO letter indicating that additional time was needed to conduct the due diligence process with respect to the April 1, 1998 partial wind-up and that they would provide a “further” progress report by February 28, 2007.
- By letter dated February 5, 2007, FSCO indicated that FSCO looked forward to receipt of the written progress report prior to February 29, 2007.
- On February 28, 2007, Unilever wrote to FSCO indicating that they continued to conduct a historical review of all prior events impacting the Plan and that an additional Plan viewing was tentatively scheduled for March 22, 2007 pending FSCO approval.
- On March 13, 2007, FSCO confirmed that an appointment for a second Plan viewing was scheduled for March 22, 2007 and asked for an update on the progress of the preparation of the partial wind-up reports no later than May 2, 2007.
- On May 2, 2007, Unilever asked for an extension of the deadline set for the written update to July 13, 2007. This request was granted by FSCO by letter dated May 9, 2007.
- On July 10, 2007 Unilever indicated that due to “unavoidable resource constraints”, the Plan viewing scheduled for March 22, 2007 could not be carried out but that a Plan viewing was scheduled for the third quarter of 2007. Unilever committed to providing a further progress report in the “next quarter”.
- On August 13, 2007, FSCO wrote to Unilever asking for confirmation of the date of Plan viewing in order to prepare the files for Unilever. A response was received on September 28, 2007 indicating no viewing had been scheduled due to Unilever being “short staffed” but that a viewing would be scheduled “very soon” for the fourth quarter of 2007.
- As of February 20, 2008, no response had been received by FSCO and no Plan viewing had been scheduled.
- The partial wind-up reports required to be filed under the PBA within six months of the 1998 Plan wind-ups remain outstanding.
- Section 87 of the PBA grants the Superintendent of Financial Services the authority to order an administrator to take any action in respect of a pension plan or pension fund in circumstances where the administrator of the pension plan is contravening a requirement of the PBA or the Regulation and to specify the time within which the administrator must comply with the order.
- Such further and other reasons as may come to my attention.
YOU ARE ENTITLED TO A HEARING by the Financial Services Tribunal (the “Tribunal”) pursuant to section 89(6) of the PBA. To request a hearing, you must deliver to the Tribunal a written notice that you require a hearing, within thirty (30) days after this Notice of Proposal is served on you.*
YOUR WRITTEN NOTICE must be delivered to:
Financial Services Tribunal
5160 Yonge Street
Attention: The Registrar
FOR FURTHER INFORMATION on a Form for the written notice, please see the Tribunal website at www.fstontario.ca or contact the Registrar of the Tribunal by phone at 416- 590-7294, toll free at 1-800-668-0128, ext. 7294, or by fax at 416-226-7750.
IF YOU FAIL TO REQUEST A HEARING WITHIN THIRTY (30) DAYS, I MAY CARRY OUT THE PROPOSAL AS DESCRIBED IN THIS NOTICE.
DATED at Toronto, Ontario, this 7th day of March, 2008.
K. David Gordon
Deputy Superintendent, Pensions
Unilever Canada Pension Plan
160 Bloor St. East, Suite 1500
Attention: Christine Ward,
Director Pensions & Benefits
*NOTE - Pursuant to section 112 of the PBA any Notice, Order or other document is sufficiently given, served or delivered if delivered personally or sent by regular mail and any document sent by regular mail shall be deemed to be given, served or delivered on the seventh day after the date of mailing.