Flashback: IBM Canada Limited v. Waterman, 2013 SCC 70 – Pension Benefits Not Deductible from Wrongful Dismissal Award
Ed. Note: On “Flashbacks Fridays” I report on cases that pre-date this service, expanding upon Optimize Pension’s collection of case law for future research purposes.
Waterman had been working for IBM for 42 years when he was dismissed without cause. He commenced an action for wrongful dismissal. At trial, Waterman was awarded 20 months’ notice. In addition, the trial judge found that pension benefits paid to Waterman during the reasonable notice period were not deductible from the damages award.
IBM appealed the pension deductibility issue to the British Columbia Court of Appeal, which dismissed the appeal. A further appeal to the Supreme Court of Canada was also dismissed.
Hiscocks v. Ontario (Superintendent Financial Services), 2016 ONFST 5 – No Obligation to Remind Employee of Eligibility on Sale of Business
Hiscocks began working for Spar Aerospace Limited (Spar) in 1979 and became eligible to join the pension plan, a voluntary, contributory defined benefit plan, 12 months later. He waived his right to join the plan.
In 1997, when certain Spar assets were purchased by DRS Technologies Canada Ltd. (DRS), Hiscocks became an employee of DRS and was eligible to join the DRS plan, a "mirror" of the Spar pension plan. Eventually, in 2004, Hiscocks joined the DRS plan, which, at the time, included a provision permitting a buy-back of past service. This provision had been removed by the time Hiscocks asked about buying back past service in 2012.
Flashback: NCR Canada Ltd v. IBEW, Local 213, 2015 BCCA 44 – Member Communications Prevent Employer from Amending Plan
Ed. Note: On "Flashbacks Fridays" I report on cases that pre-date this service, expanding upon Optimize Pension's collection of case law for future research purposes.
This case began back in 2001 when NCR Canada Ltd. (NCR), which had historically sponsored a defined benefit plan, introduced a new defined contribution component for new hires. Current employees were given a “one-time opportunity” to choose between their current DB plan and the new DC option.
Fredericton Police Association v. Superintendent of Pensions, 2016 NB FCST 2 – Tribunal Takes Issue with Superintendent Process and Orders Change to Asset Transfer Valuation Method
This is the latest decision related to the ongoing dispute between the Fredericton Police and Fire Fighters' Associations and the City of Fredericton with respect to the City's defined benefit pension plan. First, some background:
- The City's original DB plan had been funded on a going concern basis only, as it was exempt from solvency funding requirements.
- In 2011, the City attempted to address the plan's funding deficit by: increasing pension contributions, reducing indexing and changing the definition of “pensionable earnings”.
- The Police and Fire Fighters launched a number of proceedings before the New Brunswick Labour & Employment Board. First, in response to the change to "pensionable earnings" and then in response to the City of Fredericton's 2013 decision to convert the plan from a DB to a shared risk plan.
- The Labour Board issued an order essentially prohibiting the City from transferring the Police and Fire Fighters into the shared-risk plan.
- This resulted in the splitting of the original plan into two plans: a new DB plan for Police and Fire Fighters (the Police and Fire Plan) and the conversion of the original plan into a shared-risk plan for the remainder of the City employees.
- The assets and liabilities were split between the two plans in accordance with an actuarial report that was subsequently approved by the New Brunswick Superintendent of Pensions.
Estate A.B.C. v. Respondent 1 and the Superintendent of Pensions, 2016 NBFCST 1 – Interpretation of “Cohabit” and “Substantially Dependent”
The pension plan member died prior to retirement. At the time of his death, he had three adult children and was cohabiting with Mrs. C (the children's mother had died previously). Mrs. C was of the view that she was entitled to the member's death benefit, while the children argued that the member's estate was entitled to the death benefit, as Mrs. C did not qualify as a "spouse" under the New Brunswick Pension Benefits Act (NB PBA) (as it read in 2010).
“spouse” means either of a man and a woman who
(d)not being married to each other, have cohabited
(i)continuously for a period of not less than three years in a conjugal relationship in which one person has been substantially dependent upon the other for support, or
and have cohabited within the preceding year;
The New Brunswick Financial and Consumer Services Tribunal determined that Mrs. C qualified as a spouse under the NB PBA at the relevant time and, as such, she was entitled to the death benefit.
In this marriage breakdown case, one of the assets at issue was the husband's pension plan (the Plan). In 2013, the Plan administrator provided a valuation of the husband's pension of $445,681.68, based on a transfer ratio of 73.1%. The parties subsequently entered into a settlement agreement based on the foregoing valuation.
About two years later, the plan administrator advised the parties that it had mistakenly applied the discounted transfer ratio to the valuation of the husband's pension and in fact, the husband's pension should have been fully valued at $609,687.67. The wife brought a motion to amend the pension provision in the settlement and to be paid an additional sum based on the increased value of her former husband's pension.
Carey v. Ontario (Superintendent Financial Services), 2016 ONFST 2 -Tribunal Rejects Request for Hearing in Long Running Surplus Sharing Case
This case is the latest (seemingly final) decision in the long running surplus case involving Canada Life Assurance Company (Canada Life). In this latest go round, a group of applicants (a mix of members represented by counsel and self-represented) argued that that the underlying commuted value of their pension benefits should be calculated on a different basis than that approved under the plan's partial wind up report.
Feldstein v. 364 Northern Development Corporation, 2016 BCSC 108 – Negligent Misrepresentation of LTD Benefits Costs Employer
Feldstein suffers from cystic fibrosis. As a result of his condition, Feldstein insists that any potential employer provide a certain level of long term disability (LTD) benefits. Feldstein had been provided with six months' working notice by his current employer and applied for a new position.
When interviewing with 364 Northern Development Corp. (364) Feldstein asked about the LTD benefits and specifically about a reference to “Proof of Good Health”. Based on discussions and email exchanges with Nizker, 364's Chief Information Officer, Feldstein understood that this phrase referred to the successful completion of a three-month probationary period (as opposed to a medical exam or other approval process). Feldstein went on to accept a position with 364, with the belief that he would be entitled to approximately $4,669 per month in LTD benefits after completion of three months' employment with 364.
General Motors of Canada Limited v. Ontario (Superintendent Financial Services), 2014 ONFST 11; 2015 ONFST 39 – Indexation Not Ancillary Benefit; Costs of Pension Proceedings
In 2009 General Motors of Canada Limited purchased CAMI Automotive Inc. CAMI sponsored a pension plan with an indexation provision, providing annual inflation indexing for Pensioners “who retired from active employment with the Company”. GM amended the plan to remove the indexation provision except as it applied to active employees who had already become eligible to for a pension as of the effective date of the amendment. The plan members challenged the amendment, arguing that it reduced accrued pension benefits contrary to s. 14 of the Ontario Pension Benefits Act (the PBA). The Superintendent agreed with the challenge and issued a Notice of Intended Decision (NOID):
Mumby v. General Motors of Canada Limited, 2015 HRTO 1470 – Deducting WSIB Benefits from Early Retirement Not Discriminatory
Mumby, an employee of General Motors of Canada Limited, was injured on the job. After performing modified duties for a number of years, he was referred to the WSIB labour market re-entry (LMR) program in 2004 and began receiving workplace insurance benefits. While Mumby performed well in the LMR program, he indicated that he had no intention of working again. A couple of years later, Mumby, who by then had 30 years of credited service in the GM pension plan, elected to take early retirement.