The United Steel Workers of America has launched a breach-of-trust action against Cominco (TSE), claiming the company improperly used surplus pension funds.
The union charges that surpluses earned in Cominco’s original pension plan were improperly used to reduce unfunded liabilities in other company plans as well as to meet current service obligations in those plans.
Cominco’s original pension plan was set up in 1926 and frozen in 1966 when additional company plans were developed for current-service employees. Ken Neumann, a spokesman for the Steelworkers, said Cominco transferred more than $20 million from the original pension plan.
Neumann said the original plan covered all of Cominco’s workers, while from 1967 on a number of separate pension plans have been developed for various groups in the company.
Ralph Eastman, a spokesman for Cominco, said the company’s actions were all above board and that the transfers to other funds were documented in numerous previous pension fund annual reports.
No court date has been set for the matter.
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