FINANCIAL SERVICES TRIBUNAL
2000 ONFST 3
Decision No. P0086-1999-1
IN THE MATTER OF the Pension Benefits Act, R.S.O. 1990, c.P.8, as amended by the Financial Services Commission of Ontario, 1997, S.O. 1997, c.28;
AND IN THE MATTER OF a decision of the Superintendent Of Financial Services dated October 27, 1999, that a former member of the Ontario Teachers’ Pension Plan, Registration Number 0345785, Thomas Caster, was not entitled to a transfer of the commuted value of his pension under the terms of the Plan and subsection 42(3) of the PBA;
AND IN THE MATTER OF a Hearing in accordance with subsection 89(8) of the Act
B E T W E E N:
THOMAS CASTER Applicant
- and -
SUPERINTENDENT OF FINANCIAL SERVICES and ONTARIO TEACHERS’ PENSION PLAN BOARD Respondents
BEFORE: Ms. Martha Milczynski, Chair of the Tribunal and the Panel Ms. Judith Robinson, Member of the Tribunal Mr. William Forbes, Member of the Tribunal
APPEARANCES:
For the Applicant: Mr. Alan Redway, Q.C.
For the Superintendent: Ms. Deborah McPhail
For the Ontario Teachers’ Pension Plan Board: Ms. Anne Slivinskas
HEARING DATE: January 19, 2000 Toronto, Ontario
REASONS FOR DECISION
ISSUE AND SUMMARY
- On January 19, 2000, the Tribunal dismissed an application brought by the Applicant, Thomas Caster, a member of the Ontario Teachers’ Pension Plan (the “Plan”). The issue was whether:
In the circumstances of this case, and in the event of the Applicant’s termination of employment, should the Ontario Teachers’ Pension Plan Board (the “Board”) be required to transfer an amount equal to the commuted value of the Applicant’s pension pursuant to section 42 of the Pension Benefits Act?
- The Tribunal held that section 42(3) of the Pension Benefits Act (“PBA”) is clear that the option to transfer the commuted value of an accrued pension on termination is not available to a pension plan member who is eligible to receive immediate payment of a pension benefit unless the terms of the pension plan provides for such an entitlement. Having become eligible for an immediate pension on June 1, 1998 under section 43(1a) of the Plan and by virtue of section 37(2) of the Plan that expressly excludes a member who is entitled to an immediate pension from entitlement to a transfer of the commuted value of his or her pension, the Applicant does not therefore have the option to transfer his commuted value in the event of the termination of his employment.
FACTS
Mr. Caster was born on March 2, 1945 and commenced his teaching career and participation in the Plan in 1967. He is currently employed as a teacher and is still a member of the Plan.
On April 24, 1998, the Plan announced that an early retirement window would be in effect from June 1, 1998 to December 31, 2002. Effective June 1, 1998, a Plan member whose age and qualifying years of service equalled 85 points would be eligible for the improved early retirement option (“Factor 85") under the Plan. Information regarding Factor 85 was communicated through a “Teachers’ Pension Plan Board Bulletin” dated April 24, 1998 and a “Teachers’ Pension Plan Board Exchange” dated April 1998. The “Exchange” indicated that Factor 85 affected the ability of an eligible Plan member to take the commuted value of his or her pension:
...You can only transfer the commuted value of your pension before you’re eligible for an immediate pension. An 85-factor window means you may be eligible to retire with an unreduced pension sooner.
If you already have your 85-factor and are interested in taking a commuted value transfer, you must resign by May 31, 1998.
The Applicant was aware that he would be eligible for Factor 85 on June 1, 1998 and on April 28, 1998 he requested that the Board provide him with an estimate of his termination options as at May 31, 1998.
On or about May 6, 1998, the Board provided the Applicant with details of his estimated termination options and advised that once the Factor 85 took effect on June 1, 1998, any member who ceased employment with at least Factor 85 would not be eligible for a commuted value transfer. Mr. Caster also received a brochure entitled “Weighing Your Options”, dated April 22, 1998 that indicated:
To take the CV transfer option, teachers eligible for an 85-factor pension June 1, 1998 must apply by May 31, 1998.
You must quit and apply for a CV transfer before you’re eligible for an 85-Factor pension or age 55. For example, teachers under age 55 who are eligible for an 85-factor pension on June 1, 1998 must terminate employment and apply by May 31, 1998.
- In his evidence, the Applicant stated that he knew the effect Factor 85 would have on his ability to take the commuted value of his accrued pension if he terminated his employment on or after June 1, 1998. The Applicant also testified that he made his decision not to terminate his employment before June 1, 1998 because:
(1) He did not want to leave his students prior to the end of the school year on such short notice;
(2) There was uncertainty as to his eligibility for certain other benefits and payments if he were to terminate and opt for a commuted value transfer – this issue was the subject of grievance arbitration proceedings which did not involve the Applicant but which could affect his decision; these proceedings had not concluded by June 1, 1998; and
(3) He was concerned with the haste and lack of detailed information surrounding the amendment process.
- The Tribunal can understand that the Applicant had concerns regarding such a significant decision with which he was faced. However, in considering his request for a transfer of the commuted value of his pension, the Tribunal is bound by the provisions of the PBA, and the terms of the Teachers' Plan.
PENSION BENEFITS ACT
- The relevant provisions of the PBA are:
s.42 (1) A former member of a pension plan who, on or after the 1st day of January, 1988, terminates employment or ceases to be a member of the pension plan and who is entitled to a