Ontario’s pension regulator is seeking the windup of the Sears Canada Inc. pension plan as the company continues the liquidation process.
On Nov. 10, the superintendent issued a notice to the plan administrator and Sears informing them of the intent to wind up the pension plan as of Oct. 1, 2017. The parties can request a hearing on the issue before the Financial Services Tribunal but if they don’t, the superintendent will issue an order winding up the plan, the notice states. Despite the windup, the defined contribution component of the plan will continue until all members have left their jobs at Sears.
The move comes as the court dealing with Sears’ restructuring under the Companies’ Creditors Arrangement Act has been preparing to deal with a motion by the retiree group this summer to wind up the pension plan, which had a $267-million windup deficit in the defined benefit component as of its most recent actuarial report. In response, Ontario Superior Court Justice Glenn Hainey ordered that there should be no payments to most creditors or any move to seek the bankruptcy of Sears prior to determining the windup motion. The judge postponed the motion until at least Nov. 30.
According to a report on the Sears proceedings by the restructuring monitor, FTI Consulting Inc., any move by the superintendent to wind up the plan would render the retiree motion unnecessary. The parties have 30 days from Nov. 10 to seek a hearing on the superintendent’s notice of a plan windup. The Financial Services Commission was unable to confirm by Monday whether the parties had sought a hearing, but Andrew Hatnay, a lawyer at Koskie Minsky LLP representing Sears retirees, said he was unaware of any objections so far.
“If the superintendent winds up the plan, then it is expected that we will not need to proceed with our motion for a court order to wind up the plan,” said Hatnay.
Editor’s note, Nov. 24: FSCO has since confirmed it hasn’t received any requests for a hearing so far. The parties have until Dec. 15 to do so, the regulator noted.