Ari Nathan Kaplan

The Financial Services Tribunal held a hearing to consider the approval of Minutes of Settlement regarding the partial wind-up of a pension plan and the distribution of surplus.

The Tribunal approved the settlement, added affected members as parties, and ordered the applicant to file an amendment to the plan and a surplus withdrawal application.

The Superintendent was directed to issue a Notice of Proposal approving the application.

Following a successful appeal by the employer regarding the administration of a pension plan, the parties made written submissions on costs.

The pension committee argued that its costs should be paid out of the pension fund on a substantial indemnity basis, relying on traditional trust principles.

The Court of Appeal rejected this argument, adopting the 'pension trust approach' which limits costs from the fund to cases involving the due administration of the trust or claims advanced for the benefit of all beneficiaries.

Finding the litigation to be adversarial, the Court ordered the committee to pay the employer's costs of the appeals on a partial indemnity basis.

The parties made written submissions on costs following an appeal decision that yielded divided success.

The Court of Appeal held that neither party should pay costs to the other under the usual loser-pays rule.

However, because both parties acted to protect or advance the interests of the pension plan fund on their respective successful issues, the court awarded each party $15,000 in costs per court level, payable from the fund.

The employer appealed a Divisional Court decision that overturned a Financial Services Tribunal ruling regarding the administration of a pension plan.

The Court of Appeal restored the Tribunal's decisions, holding that the employer was entitled to pay most plan expenses from the pension fund and to take contribution holidays using the actuarial surplus for both the defined benefit and defined contribution components of the plan.

The Court also found that while the notice of the conversion option was inadequate, the Superintendent was not required to refuse registration of the amended plan.

Finally, the Court held that the Tribunal lacked jurisdiction to order costs payable from the pension fund.

The appellants, former employees receiving pensions under the Bank of Canada Pension Plan, brought a proposed class action alleging the Bank improperly extracted funds from the Plan to cover administration costs.

The Bank successfully moved under Rule 21 to strike the claim for direct distribution of the extracted funds to class members and obtained a declaration that the action could not proceed under the Class Proceedings Act due to s. 37(a).

On appeal, the Court of Appeal upheld the striking of the direct distribution claim, finding that restitution to the Plan was the appropriate equitable remedy.

However, the Court allowed the appeal in part, holding that s. 37(a) does not preclude the action from being brought as a class proceeding simply because it could be brought as a representative proceeding under Rule 10 of the Rules of Civil Procedure.

The applicant sought to purchase past service credits in the OPSEU Pension Plan for casual employment prior to 1979.

He had previously applied to buy back this service in 1979 under the predecessor plan but failed to complete the process within the required timeframe.

When the 1989 Public Service Pension Act came into force, it provided a time-limited window until December 31, 1991, for members to purchase prior non-credited service.

The applicant did not apply within this window.

The Financial Services Tribunal upheld the Superintendent's Notice of Proposal to refuse an order directing the Plan to allow the purchase, finding that the applicant failed to meet the mandatory statutory deadline and that the Tribunal had no authority to waive the Plan's terms.

The appellants, representing members of a salaried pension plan, appealed a decision of the Financial Services Tribunal that upheld the Superintendent's consent to merge their plan with an hourly-paid plan.

The appellants argued the merger would dilute their plan's surplus and that the surplus constituted 'other benefits' protected under s. 81(5) of the Pension Benefits Act.

The Divisional Court held that the Tribunal had jurisdiction to hear the matter and that the appropriate standard of review was reasonableness simpliciter.

On the merits, the Court found that an actuarial surplus in an ongoing defined benefit plan is not an 'other benefit' under s. 81(5), and dismissed the appeal.

The appellant pension board appealed a Divisional Court decision that a deceased member's former spouse was entitled to a portion of his pre-retirement death benefits pursuant to a separation agreement.

The Court of Appeal held that pension benefits, including pre-retirement death benefits, may be transferred under a domestic contract without the aid of s. 48(13) of the Pension Benefits Act.

The court also determined that the 50 per cent limit on transfers under s. 51(2) applied to the pre-1987 benefits, and that the calculation date for the benefits was the date of the member's death.

The appeal was dismissed and the cross-appeal was allowed in part.

The Superintendent of Financial Services proposed an order requiring the Ontario Teachers' Pension Plan Board to pay a member's pension as a joint and survivor pension.

The member and his spouse separated shortly after his retirement but before the first pension payment was made.

The Board requested a hearing, arguing the spouses were living separate and apart on the date the first instalment was due, triggering an exception under the Pension Benefits Act.

The Financial Services Tribunal agreed with the Board, finding that the due date for the first instalment was at the end of the month, by which time the spouses had separated.

The Tribunal directed the Superintendent to refrain from carrying out the proposed order.

This is a supplementary reasons for judgment regarding costs following an appeal and a Rule 59 motion concerning a pension plan death benefit.

The successful appellant sought substantial indemnity costs payable out of the pension plan fund.

The court found that the litigation clarified a problematic part of the Pension Benefits Act, benefiting members and administrators of plans throughout Ontario.

Applying the principle that costs of litigation necessary for the administration of a trust should be paid from the trust, the court awarded the appellant substantial indemnity costs of $40,000 plus disbursements, payable by the Board from the funds of the Plan.

The Ontario Teachers' Pension Plan Board brought a motion to amend a previous Divisional Court order regarding the allocation of a deceased member's pre-retirement death benefit between his former spouse and his surviving spouse.

The court held that the former spouse's entitlement under a separation agreement was not limited to benefits accrued after 1986, as the Pension Benefits Act provisions allowing assignment of pension benefits on marriage breakdown applied to both pre-1987 and post-1986 benefits.

However, the court found that section 51(2) of the Act limited the former spouse's entitlement to 50% of the benefits accrued during the period of marriage, which ended on the date of their divorce.

The appellant employer sought to partially wind up its defined benefit pension plan following a corporate reorganization and plant closure, without distributing the $3.1 million pro rata share of the actuarial surplus to the affected members.

The Superintendent of Financial Services refused to approve the report, but the Financial Services Tribunal ordered its approval, relying on the doctrine of legitimate expectations and its interpretation of the Pension Benefits Act.

The Divisional Court overturned the Tribunal's decision.

On appeal, the Court of Appeal affirmed the Divisional Court, holding that section 70(6) of the Pension Benefits Act requires the distribution of surplus on a partial wind up, and that the doctrine of legitimate expectations cannot be used to create substantive rights or override statutory obligations.

The appellant appealed a Financial Services Tribunal decision that directed the Superintendent not to order the Ontario Teachers' Pension Plan Board to pay her a pre-retirement death benefit.

The appellant and the deceased plan member had separated and executed a separation agreement dividing the pension, but the deceased later remarried.

The Divisional Court held that under section 48(13) of the Pension Benefits Act, the subsequent spouse's entitlement to the death benefit is subject to the former spouse's interest set out in a valid domestic contract.

The appeal was allowed and the Board was ordered to pay the appellant her share of the benefit.

Following the sale of a business, the Superintendent of Pensions approved the transfer of pension assets and liabilities from the exporting employer to the importing employer without giving notice to the importing employer's employees.

The employees applied for judicial review, arguing a breach of natural justice.

The Court of Appeal dismissed the appeal, holding that the Superintendent's procedure was reasonable.

The court found that the employees' interests would be adequately protected at the second stage of the process, when the importing employer applied to amend its pension plan, at which point notice and an opportunity to make submissions would be provided.