Financial
Services Commission of Ontario
June 26,2001
5160 Yonge Street
Hand Delivered
North York, Ontario
M2N 6L9
Attention: Ms. Dina Palozzi
Superintendent of Pensions
Dear Ms. Palozzi
Re: Pension Plan for Employees of Wajax Industries
Ltd.,
Registration No.281006
We the undersigned are the representatives of a large group of members of the
above plan.
Our members are very concerned with changes being made to this plan and
request that this plan be deemed to have been wound up and the surplus in its
entirety distributed to the plan members. Our reasons for this request are as
follows:
1. The plan was instituted as a Defined Benefit Plan and the members
have contributed to same continuously. Approx every three years since the
beginning surpluses were used to upgrade the earned pension of active members
with a nominal increase to pensioners. This upgrade program was discontinued
in 1995.
2. In March of 2001 all the retired members and deferred pension members
were notified that their pensions had been sold to Industrial Alliance. In the
Wajax annual report issued in April it states that this transaction was in
fact consummated in the year 2000 and that the company had taken into income
2.7 million dollars of surplus due to this sale.
3. Effective Dec 31/00 the vast majority of active members of the plan
were arbitrarily informed that they were being transferred from their present
plan to a defined contribution plan and were given an option of taking a paid
up pension or transferring the commuted value to the defined contribution plan
or an RRSP. The only people being left in the prior plan were in the companies
words
" a few employees covered by union contract and some employees that were on
disability leave"
These changes in effect wind up the existing plan for the vast majority of our
members thus we ask for a ruling that this plan be wound up. From a copy of an
internal briefing memo of the company in our possession it would seem
management privately concur. This memo discusses ways to change to a defined
contribution plan without sharing the surplus with the employees. It describes
precisely what they seem to have done and concludes that by leaving the
disabled in the plan they would contend the plan continues thus not giving any
of the surplus to the members.
Their conclusion is Quote:
""This would in effect close the DB section of the plan and over a
few years we would expect that all the employees will either retire or
terminate in effect closing the DB section without incurring the conversion
cost outlined above""
The reason we feel that 100% of the surplus should go to the members is as
follows:
We are informed that since 1986 the company has taken a continuous
contribution holiday thus the surplus has been earned totally by employee
contributions. It would be unfair should they not get the entire surplus. We
question whether they rightfully took this contribution holiday.
Thanking you for your consideration of the above.
We Remain
For the Members
