According to Simon Archer of Koskie Minsky in the article Nolan v. Kerry and its Place in Pension Deliberation “Although Kerry (and others in the line of cases) will not create or erode pension plan provision in Canada, they do perhaps have the effect of putting employees and retirees on notice about the governance of pension plans and funds. These cases draw attention to the standards that will be used in managing these (very large) financial assets.”

The Court found it possible for one plan to hold both defined benefit and defined contribution components and for Plan expenses to be paid from the Trust Fund provided the proper structure and documentation are in place. From a pension plan governance perspective this demonstrates the importance of:

• taking care when drafting and amending Plan documents
• retaining accurate and complete copies of all documents
• ensuring Plan expenses are reasonable and necessary
• ensuring Plan expenses provide benefit to plan members

Note: the above commentary is not intended as legal advice.

References:

Nolan v. Kerry and its Place in Pension Deliberation
The Last Word on Kerry by Davis LLP
Blake, Cassels & Graydon articles on the Kerry Case