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Alberta CA Nixes Earnings Freeze on DB/DC Conversion

Posted by on Sep 15, 2010 in Retirement | 0 comments

The Alberta Court of Appeal overturned the Court of Queen’s Bench and supported the Superintendent’s position in Halliburton Group Inc. v. Alberta ruling that when a defined benefit (DB) plan is frozen for future service, the earnings cannot be frozen for accruals up to the date of conversion.

In a Mercer Communiqué, the authors write:

“The Court appeared not to notice the apparent intention of Section 81(2) of the Employment Pension Plans Act that salary increases will not be recognized in a DB plan with frozen service unless the plan expressly provides for it. The Court made a narrow interpretation requiring plan sponsors to have contemplated in the original plan text the possibility of ignoring future member salary increases.” READ MORE

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