Markus F. Kremer

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.

The Superintendent of Financial Services appealed a decision of the Financial Services Tribunal regarding the partial wind-up of a pension plan by Monsanto Canada Inc. The Tribunal had ruled that Monsanto was not required to distribute pension surplus on a partial wind-up and that Monsanto had a legitimate expectation based on past regulatory practice.

The Divisional Court allowed the appeal, adopting the dissenting reasons of the Tribunal.

The Court held 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 expectation cannot justify disregarding the requirements of the law.