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Court approves revised pension surplus class action settlement as fair and reasonable.
In a class proceeding concerning the ownership of surplus from partial wind-ups of a pension plan and alleged improper administrative expenses, the parties sought approval of a revised settlement agreement after earlier settlement arrangements failed due to significant changes in actuarial surplus estimates.
The motion was brought under s. 29 of the Class Proceedings Act, 1992 for court approval of the amended settlement.
Despite objections from certain class members, the court held the revised agreement was fair, reasonable, and in the best interests of the class when assessed against litigation risks, fluctuating actuarial calculations, and the possibility that the employer might ultimately have been entitled to the surplus.
The settlement substantially increased the guaranteed distribution to class members and included financial concessions from both the defendant and class counsel.
The court approved the amended settlement as falling within the acceptable range of reasonableness for class action settlements.
Court refused to approve amended class action settlement deemed substantively and procedurally unfair.
The plaintiffs in a pension surplus class action moved for court approval of an amendment to a previously approved settlement after actuarial assumptions underlying the settlement proved incorrect and the anticipated surplus dramatically declined.
The amended settlement offered a guaranteed minimum payment and a potential capped second distribution if surplus re‑emerged by a specified date.
Numerous class members objected, arguing the amendment was unfair and inconsistent with the expectations created during the original settlement campaign.
The court held that it had jurisdiction under s. 29(2) of the Class Proceedings Act, 1992 to approve or reject the amended settlement but concluded the proposal was substantively, procedurally, circumstantially, and institutionally unfair.
The court emphasized that settlement approval requires fairness beyond mere monetary advantage and refused to approve an unfair settlement even if it represented the better option among undesirable alternatives.
