Malcolm Gorrill
Northern News Services

Yellowknife (Mar 24/00) - An official with Morneau Sobeco has confirmed that in 1997 the Royal Oak Pension Committee invested funds in Royal Oak shares.

Al Kiel, a partner with Morneau Sobeco, which has been managing the pension fund since Miramar's purchase of Giant mine in December 1999, said his company is investigating the matter.

Kiel said some pension plans do invest in their own company. He said trustees may invest up to 10 per cent of a pension fund in a publicly traded company.

"Those maximums can vary, but generally it's not to exceed 10 per cent of the pension fund," he said.

As the matter is still under investigation, Kiel could not say exactly how much money was invested. However, the Canadian AutoWorkers claim that in 1997, the Royal Oak Pension Committee invested $2.2 million from their four pension plans in Royal Oak shares.

Of this $2.2 million, $248,000 came out of the Yellowknife Hourly Pension Plan. That plan is currently underfunded. Retired miners in that plan are bracing for a 25 per cent cutback to their benefits beginning April 1.

Marc Danis, president of the Local 2304 CAW, said legislation must be amended to protect workers.

"We're appalled," Danis said.

"If you knew your company was going under and your stock is going down, down, down, and you start purchasing $2.2 million," Danis said, "I mean, what does that say?"

As well, the national representative in the Pension and Benefits Department for CAW Canada said the matter is under investigation.

"We're working on it," Jo-Ann Hannah said Wednesday.

Hannah said the board of directors should have had concerns over what she termed a "questionable investment."

As well, she said, "There really has to be stronger legislation to protect workers' pension funds."

Hannah referred to 1998 changes to the Pension Benefits Standards Act.

"It used to be a requirement that any pension plan with a company, if they made any amendments to it, then they had to file with the Office of the Superintendent of Financial Institutions, and the superintendent had to review the plan."

Hannah said since the changes, the superintendent can review the plan, but is no longer required to.

"What they changed is that the plan administrator, who is employed by the company, must sign a form saying, 'yes, this pension plan complies with the legislation.'"

Hannah said she sees a problem with this.

"The pension plan administrator is being paid by the company, and so even if they're trying to be very objective, they're going to have a bias to do what is in the best interests of the company."