UPS wins return of $50.74 million mistakenly paid into pension plan

An Ontario court has ordered the return of $50.74 million that United Parcel Service Canada Corporation mistakenly contributed to its pension plan after relying on an incorrect actuarial valuation.

In United Parcel Service Canada Corp. v. MacDonald, 2026 ONSC 5770, released October 13, 2026, Justice Jana Steele of the Ontario Superior Court of Justice's Commercial List granted restitution of $50,742,012.37. The order took immediate effect.

The judge found that the mistaken payments were not ordinary surplus funds in which plan members had an interest. Returning them would not affect members' benefits. The ruling orders a refund; it does not establish that the money has already been transferred.

An error made contributions appear necessary

UPS is the sole participating employer in the federally registered defined-benefit plan, which was established for eligible Teamsters members. A joint board of six trustees, three appointed by UPS and three by Teamsters, administers it.

The trustees retained Plenus Actuaries and Consultants Inc. to prepare valuations for the years ending in 2021, 2022 and 2023. These reports assess a pension plan's funding position and identify required employer contributions, among other things. UPS made contributions based on those valuations.

After errors in the 2022 and 2023 reports were addressed, UPS determined that the 2021 report was also wrong. It incorrectly stated the minimum funding requirements for 2022 and failed to identify that the plan had enough assets to permit a contribution holiday, meaning UPS was not required to contribute.

Believing the payments were necessary, UPS contributed almost $51 million in 2022 and 2023. The contributions were permitted under the Income Tax Act, but they were not required by the plan terms or federal pension legislation.

Plenus later prepared and filed a corrected 2021 valuation confirming that a contribution holiday had been available. UPS said it would not have made the excess payments had the reports accurately stated the funding requirements. The trustees reviewed the calculation and did not dispute the $50,742,012.37 amount.

Why the court could order repayment

The plan is governed by the federal Pension Benefits Standards Act and supervised by the Office of the Superintendent of Financial Institutions. The Canada Revenue Agency oversees its registration and compliance under the Income Tax Act.

Steele found that the federal regime did not provide a mechanism for obtaining this particular refund. But that did not prevent the court from using its equitable jurisdiction, its authority to grant remedies such as restitution where legal principles require money to be returned.

The federal pension statute was not a complete code displacing those remedies. The judge contrasted it with Ontario's pension legislation, which expressly provides a regulatory mechanism for consenting to reimbursement of employer overpayments. This was a federally registered plan, not an application under that Ontario provision.

The governing rule was restitution for a mistake of fact. A person who pays money because of such a mistake is ordinarily entitled to recover it, subject to three exceptions: the payer intended the recipient to keep the money regardless of the mistake; the payment was supported by a valid exchange or obligation; or the recipient changed its position in good faith.

Steele found that none applied. UPS had not intended to make the contributions whether or not they were required. The corrected report showed that the payments did not satisfy a funding obligation, because no such obligation existed. And the plan had not changed its position in reliance on retaining the money.

Members' benefits were unaffected

The reasons recorded that the plan was expected to remain in surplus even after the refund. No pension improvements had been implemented in reliance on the excess contributions, and no decisions had been made on the assumption that those funds would stay in the plan.

Those findings mattered both to the restitution analysis and to the position of members. After the first hearing, Steele requested further submissions, including on notice to Teamsters and retired or deferred vested members. UPS then notified Teamsters, which did not appear.

The judge concluded that, because the contributions had clearly been paid in error, they were not surplus funds in which members had an interest. The mistaken contributions were not available to purchase, secure or enhance member benefits, and returning them would not affect those benefits.

The ruling therefore does not give employers a general right to withdraw ordinary pension surplus. It addresses identified payments made under a proven mistake, where no funding obligation required them and the plan had not relied on them to improve benefits or make other decisions.

Trust status did not prevent restitution

Steele also rejected the idea that payment into a pension trust changed the result. Contributions generally must be used under the plan and trust terms for beneficiaries. But a mistaken payment may be returned in appropriate circumstances. Keeping these contributions would give the fund a windfall of more than $50 million, she found.

The judge said unjust enrichment provided an alternative route to the same outcome: the fund received a benefit, UPS suffered a corresponding loss, and there was no legal justification for retaining the mistaken payments. The only reason they had been made was the incorrect certification of UPS's required contributions.

The respondents were named in their capacities as trustees. This was not a personal-liability award against them or a professional-negligence damages award against the actuary.

Non-participation was not regulatory approval

The trustees took no position on the application, subject to any applicable regulatory consents from OSFI and the CRA. Both regulators and Teamsters received notice, but none filed materials or appeared. OSFI had also been consulted about the overpayment.

Their non-participation should not be confused with endorsement of the refund or proof that any applicable regulatory consents had been obtained. The court granted the requested restitution and made its order effective immediately, on the facts and legal grounds set out in the reasons.