WINNIPEG – It appears to be both good news and bad news for MTS Allstream after a Manitoba court ruled on a lawsuit regarding the 1997 initial funding, ongoing surplus and governance of the company’s pension plan.
In its decision, the Court upheld the governance of the pension plan and affirmed MTS Allstream’s position with respect to the issue of ongoing surplus, and the company said that it will not make changes to its future ongoing funding requirements and administration of the plan as a result. However, the Court also ruled that MTS was obligated to make a $43 million one-time payment, retroactive to 1997, the year the company was privatized and its pension plan was implemented.
MTS Allstream said that “key aspects of this part of the decision are flawed” and that it will appeal the decision.
"MTS Allstream has always provided strong support for the MTS Pension Plan and we are pleased that the Court has affirmed the governance of the plan," said CCO Chris Peirce, in a statement. "However, in order to reach the decision regarding the $43 million one-time payment, the Court has set aside the critically important opinion of an independent actuary appointed by the Provincial Auditor of Manitoba and substituted its own opinion. We continue to believe that the Company has complied with all of the requirements of the Pension Benefits Standards Act as well as the provincial legislation that privatized MTS and led to the creation of the MTS Pension Plan. Accordingly, we will appeal the Court’s decision."
Pending the outcome of an appeal, the financial implications of the Court’s decision could result in a one-time future payment of approximately $100 million, MTS Allstream said.
