The Alberta Superintendent of Pensions has extended the deadline to file actuarial valuation reports as at December 31, 2016 until March 31, 2018. This applies to all pension plans except Collectively Bargained Multi-Employer Plans. A six month extension was also granted for actuarial valuation reports due to be filed between September 27, 2017 and December 31, 2017 . . .
Alberta introduced Bill 17, Fair and Family Friendly Workplaces Act, on May 24, 2017. If passed, the Bill will make extensive changes to the Alberta Employment Standards Code (the Code). Probably most applicable to pension plan administrators are the proposed changes to leaves of absence, including:
Costigan v. Canadian Pacific Railway Company, 2017 ABQB 294 – Employer’s Silence Not Negligent Misrepresentation nor Breach of Duty
Costigan began working for Canadian Pacific Railway Company (CPR) in 1976 and became a member of its defined benefit pension plan. Under the plan, Costigan could become eligible for an early unreduced pension at age 55 if his age plus service equalled at least 85.
In 2003, CPR outsourced Costigan’s work unit to IBM, and agreed to continue to count Costigan’s service with IBM toward his 85 Factor under the CPR plan. The agreement included a requirement that Costigan advise CPR if he left the employ of IBM for any reason.
Lafarge Canada Inc. v. International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths Forgers and Helpers, Cement, Lime, Gypsum and Allied Workers Division, 2017 CanLII 18963 (R. Garden) – Probationary Employees Not Eligible to Participate in Pension Plan
The new collective agreement between Lafarge Canada Inc. and the union provided that employees "hired on or before December 31, 2014" would be eligible to receive benefits under the defined benefit (DB) pension plan, subject to the terms of the DB plan. Employees hired after that date would be eligible to participate in a new defined contribution (DC) pension plan.
The collective agreement also provided for two classes of employees: permanent and temporary. Generally, temporary employees did not accrue seniority, unless they were subsequently hired as a permanent employee and there was no break in their service - then their seniority was calculated from their “last date of hire”.
Alberta Interpretive Guideline #12: Governance, Investment and Funding Policies and Plan Assessments
Alberta Treasury Board and Finance has posted draft Interpretive Guideline #12: "Governance, Investment and Funding Policies and Plan Assessments" for comment. The Guideline updates an earlier version published in July 2016. Comments are due by June 30, 2017.
Alberta Motor Association v. Gladden, 2017 ABQB 174 – Agreement to Transfer Employee Pension to Employer in Response to Fraud Receives Court Approval
Gladden, a senior employee of Alberta Motor Association (AMA), committed fraud against the AMA.
The AMA received a consent judgment against Gladden in the amount of $10,236,945.26. As a part of the consent judgment, Gladden and his wife agreed to transfer the commuted value of his pension to the AMA. The pension was a non-contributory plan to which the AMA alone made contributions on behalf of its employees.
Calder v. Alberta, 2017 ABQB 162 – Plan Administrator May Correct Interpretive Error but Liable for Negligent Misrepresentation
In 1994, the Alberta government closed a pension plan for managers (Closed Plan) and started a new pension - Management Employees Pension Plan (MEP). A small group of employees who had left their employment with the Alberta government prior to the MEP coming into effect, and then returned to such employment as public service managers post-1994 were entitled to pensions under both plans (the Returning Managers).
The Alberta Pension Services Corporation (APSC), which administered both plans, determined in 2009 that the Returning Managers' pensions under the Closed Plan would be calculated based on:
- the member’s highest average annual salary over a 5 year period (i.e., whether earned during the Closed Plan or the MEP Plan);
- length of pensionable service under the Closed Plan;
- a Cost of Living Adjustment (COLA); and
- an actuarial adjustment, if the member had chosen to commence her or his pension after the date of eligibility.
In 2012, a subsequent review determined that the above interpretation was incorrect. The APSC came to the view that salary earned after 1994 should not to be taken into account when calculating pensions under the Closed Plan.
Alberta Interpretive Guideline #5: Division and Distribution of Pension Benefits on Marriage Breakdown
Alberta Treasury Board and Finance has posted draft Interpretive Guideline #5: "Division and Distribution of Pension Benefits on Marriage Breakdown". The Guideline summarizes the legislative and regulatory requirements applicable to the division of pension benefits on marriage breakdown, as well as best practices. The Guidelines includes information with respect to the following:
The Alberta Superintendent of Pensions announced that the deadline for having a governance policy has been extended to December 31, 2017. In addition, the Superintendent indicated that it will be publishing a revised Interpretive Guideline #12 by March 31, 2017. The revised Guideline will contain more information on how the governance policy will need to be constructed and processes that can be used to make the triennial plan assessment review more effective and efficient for plan administrators.
International Brotherhood of Electrical Workers, Local 1007 v. Epcor, 2016 ABQB 574 – Test for Bona Fide LTD Plan
McGowan had been receiving long term disability (LTD) benefits for about a year when he qualified for a pension based on his age and years of service. In accordance with the terms of the LTD plan, which was provided by a third party insurer, his LTD benefits were terminated. McGowan resigned and began collecting his pension. He also filed a grievance, arguing that the LTD plan discriminated against him on the basis of his age.
The grievance arbitration panel held that while the LTD plan was discriminatory based on age, it was exempt per s. 7(2) of the Alberta Human Rights Act (AHRA), which reads in part: "Subsection (1) as it relates to age… does not affect the operation of any bona fide retirement or pension plan or the terms or conditions of any bona fide group or employee insurance plan."