Canadian M&A Perspectives Private and Public Mergers & Acquisitions | Private Equity

Author Archives / Mark Firman

Subscribe to posts by Mark Firman

Defined Contribution Pension Plans: Uncovering the Wolf in Sheep’s Clothing?

Posted in Contractual Matters, Private Equity, Private Transactions, Public M&A, Strategy

In my last post, I briefly canvassed the differences between defined benefit (DB) and defined contribution (DC) pension plans.  I cautioned that, due to their perceived financial predictability and apparent straightforward nature, DC plans don’t always get the attention that they deserve from buyers undergoing the due diligence review of a target.

While DB plans give rise to greater financial risk, most practitioners agree that DC plans give rise to greater legal risk. For all their complexity, the rules governing DB plans are at least predictable (even if not necessarily “employer-friendly”). The rules governing DC plans in each Canadian … Continue Reading

Defined Benefit Versus Defined Contribution Pension Plans: The Basics

Posted in Contractual Matters, Private Equity, Private Transactions, Public M&A, Strategy

When purchasing an existing business, many buyers are understandably reluctant to assume obligations under a target’s defined benefit (DB) pension plan. Under a traditional DB plan, members (i.e. plan participants) are entitled to a guaranteed pension amount calculated by a formula. While active employees may contribute to such plans, each Canadian jurisdiction’s laws place the employer squarely on the hook if the plan’s assets are not enough to fund the promised benefits – and, as many of us have now seen, DB plans’ current funding woes are well-publicized. In addition, DB plans are subject to a complex regulatory scheme and … Continue Reading