FINANCIAL SERVICES TRIBUNAL
2012 ONFST 3
Decision No. P0452-2011-2
IN THE MATTER OF the Pension Benefits Act, R.S.O. 1990, c. P.8, as amended by the Financial Services Commission of Ontario Act, 1997, S.O. 1997, c.28 (“the Act”);
AND IN THE MATTER OF a Notice of Intended Decision by the Superintendent of Financial Services under sections 69(1)(d) and 69(1)(e) of the Act, to partially wind up the Imperial Oil Limited Retirement Plan, Registration Number 347054;
AND IN THE MATTER OF a Hearing in accordance with subsection 89(8) of the Act
B E T W E E N:
IMPERIAL OIL LIMITED
Applicant
- and -
SUPERINTENDENT OF FINANCIAL SERVICES and
KATHERINE HNYP
Respondents
BEFORE:
Mr. John Solursh,
Chair of the Tribunal and of the Panel
Ms Jennifer Brown,
Member of the Tribunal and of the Panel
Mr. Patrick Longhurst,
Member of the Tribunal and of the Panel
APPEARANCES:
For the Applicant, Imperial Oil Limited:
Mr. Brett Ledger
For the Superintendent of Financial Services:
Ms Deborah McPhail
Ms Katherine Hnyp on her own behalf
HEARD:
December 9, 2011
REASONS FOR DECISION
Introduction
The hearing on December 9, 2011 was the first stage of a two-stage process ordered by the Chair of the Tribunal on November 3, 2011 in Imperial Oil Limited v. Superintendent of Financial Services, November 3, 2011, FST Decision P0452-2011-1 (the “Motion Decision”). In effect the issue to be decided by the Tribunal under the two-stage process is whether the Tribunal should exercise its discretion under the Act to order a partial wind-up of the Imperial Oil Limited Retirement Plan, Registration Number 347054 (the “Plan”) with respect to Ms Hnyp’s interest in the Plan.
The Motion Decision concluded that the partial plan wind-up issue is to be addressed at stage one under the assumption that the conditions for a partial plan wind-up order exist on a basis that is without prejudice to the positions the Applicant Imperial Oil Limited (“Imperial Oil”) or the Superintendent of Financial Services (the “Superintendent”) may take on the issue at stage two, if it is required. At stage two, the Tribunal would decide whether conditions exist such that a partial plan wind-up under section 69(1)(d) or section 69(1)(e) of the Act should be ordered. Stage two is only to proceed if the Tribunal does not exercise its discretion against ordering a partial plan wind-up at stage one.
The hearing is the latest of a series of proceedings arising out of the proposed partial wind-up of the Plan following the relocation of Imperial Oil’s head office from Toronto, Ontario to Calgary, Alberta. Settlements have been reached with respect to all current and former Plan members except for Ms Hnyp who would be part of a potential wind-up group relating to the relocation of Imperial Oil’s head office. Ms Hnyp is seeking a partial wind-up of the Plan with respect to her interest in the Plan notwithstanding an offer by Imperial Oil - which Imperial Oil confirmed to the Tribunal during the hearing is irrevocable - to pay her a cash amount outside the Plan which she acknowledges “directionally” is an amount equivalent to the present value of the amount of any additional annuity she would receive from the Plan if it were partially wound up assuming on a reasonable and generous (as acknowledged by Ms Hnyp) basis that ad hoc increases would be granted voluntarily by Imperial Oil.
Imperial Oil and the Superintendent, who agreed that Ms Hnyp will receive by virtue of Imperial Oil’s irrevocable offer an equivalent (at a minimum) benefit from Imperial Oil to any added benefit she would receive if a partial wind-up were ordered, take the position the Tribunal should not exercise its discretion under the Act to order a partial wind-up of the Plan with respect to Ms Hnyp’s interest.
The Tribunal has decided, after consideration of the applicable facts and the submissions of the parties which are summarized below, that it is not prepared to exercise its discretion to order a partial wind-up of the Plan with respect to Ms Hnyp’s interest therein.
Background Facts
Ms Hnyp gave oral testimony relevant to the issue before the Tribunal including her personal objectives in pursuing this matter having been granted party status in the Motion Decision. Some additional facts and clarification of Ms Hnyp’s testimony were provided during cross examination of her by Imperial Oil’s counsel.
The relevant facts relied upon by Imperial Oil were set out in an affidavit by Mr. J. Brian MacIntyre, the Manager of Plans, Payrolls & Administration in the Human Resources Department at Imperial Oil and in a Supplementary Affidavit by Mr. MacIntyre dated November 25, 2011, which addressed certain written submissions by Ms Hnyp.
Ms Hnyp cross examined Mr. MacIntyre on certain statements in his affidavits including some facts relating to the move of Imperial Oil’s head office to Calgary and some updated information provided by Imperial Oil, to the Superintendent during his review of the events relating to the impact of the Toronto office closure. He testified that Imperial Oil had unilaterally provided updated calculations of entitlements of some affected Plan members when it became aware of additional relevant information.
The Superintendent relied upon the facts set out in the Motion Decision of the Tribunal dated November 3, 2011.
The facts summarized below reflect the Panel’s consideration of the MacIntyre affidavits, the testimony of Ms Hnyp, the cross examinations of Ms Hnyp and Mr. MacIntyre and, to the extent applicable, the decision of this Tribunal and Imperial Oil Limited v. Superintendent of Financial Services and The 111 Pension Rights Association, December 8, 2010, FST decision No. P0346-2009/P0427-2010-1 (the “Prior Decision”).
(a) Prior Proceeding
The following summary of the proceeding which resulted in 2010 in the Prior Decision (the “prior proceeding”), as set out in the Motion Decision, is consistent with the evidence at the hearing of this matter.1
In 2004, the Applicant closed its head office in Toronto and moved it to Calgary, Alberta. Out of 722 Plan members who were employed at head office, 188 had their employment terminated as a result of this move. Ms Hnyp falls within that terminated group.
The Superintendent issued a Notice of Proposal to partially wind up the Plan under section 69(1)(e) of the Act on January 16, 2009. The Applicant requested a Tribunal hearing. During the course of that proceeding, standing was granted to an association of former members of the Plan, the 111 Pension Rights Association (the “Association”). The Association did not represent all of the terminated members. The Association was represented and advised by Mr. Ari Kaplan of the Koskie Minsky law firm.
The Superintendent issued a second Notice of Proposal to partially wind up the Plan under section 69(1)(d) of the Act on January 6, 2010. Again the Applicant requested a Tribunal hearing. The two proceedings were consolidated.
It was agreed in the prior proceeding that if a partial wind-up was directed to be ordered it would only apply to former members of the Plan who stood to gain something from a partial wind up. Therefore, the group of 188 terminated members was narrowed down to 39 former members who were either not vested at the time of termination or had 55 points in age plus service but did not retire on an unreduced pension.
On October 28, 2010, the Tribunal heard a “settlement motion” in the prior proceeding. The motion was brought by the Applicant and the Association for an Order approving the settlement made between those two parties. The settlement involved payment of 50% of the grow-in benefits to which the 39 former members would otherwise be entitled on partial wind up, with a minimum payment of $1,000.00.
The settlement had the consents and releases of 36 of the 39 former members. The 3 dissenting members were not represented by the Association, and none of the 3 dissenting members attended the settlement motion or sought party status at any stage of the prior proceeding.
In approving the settlement in its Decision dated December 8, 2010, the Tribunal in the Prior Decision stated:
“The Tribunal has considered the fact that a decision to order the Superintendent to refrain from carrying out the NOP’s, and thereby make the Agreement operative, will indirectly affect the three persons who, as of the date of the hearing of this motion, had not deposited the required release in exchange for receiving a benefit under the Agreement. Whether the Superintendent would revisit the matter and propose to order a partial wind up limited to those who have not released their rights by taking their benefits under the Agreement is speculative. If he will not, an order to refrain from carrying out the NOPs will, in practice, remove their option to pursue their claim for full wind up benefits.” (Emphasis added)
(b) Present Proceeding
On January 12, 2011, the Superintendent issued a Notice of Intended Decision (the “NOID”) under sections 69(1)(d) and 69(1)(e) of the Act. The NOID stated that the Superintendent intended to order a partial wind-up of the Plan in relation to the 3 former members who were not affected by the settlement made between Imperial Oil and the Association, as incorporated into the Tribunal’s Prior Decision.
Imperial Oil requested a hearing. In accordance with usual practice at the preliminary stage of a pre-hearing conference relating to such a matter, Notice of the Pre-hearing Conference was not given to the 3 former members pending identification to persons who may have an interest in this matter and may wish to seek party status. Related discussions at the Pre-hearing Conference resulted in identification of the 3 former members including Ms Hnyp. In July and August of 2011, Imperial Oil advised the Superintendent that it had reached the settlement with 2 of the 3 former members affected by the NOID. The Superintendent subsequently received letters from each of the 2 former members confirming their respective settlements (the details of which, as confirmed in testimony at the hearing, are confidential and are not known to the Superintendent) and requested the Superintendent not to proceed with the NOID or the hearing on their behalf. Ms Hnyp is the 3rd former member.
In August 2011, Imperial Oil sent Ms Hnyp a cheque directly from itself (not from the Plan) representing the minimal amount payable under the settlement, which in the view of Imperial Oil exceeds the total grow-in amount to which Ms Hnyp would be entitled if a partial wind-up were ordered or directed to be ordered. As stated in Mr. MacIntyre’s affidavit, the offer by Imperial Oil to Ms Hnyp was based on a calculation prepared by Mr. Vettese of Morneau Shepell, the pension plan actuaries in respect of this matter. For the motion hearing, Mr. Vettese prepared a calculation (updated with interest) attached to Mr. MacIntyre’s affidavit of what Ms Hnyp’s entitlement would have been had a partial wind-up of a plan occurred. Mr. Vettese advised, in a letter dated September 14, 2011 as follows:
“If a partial wind up had occurred and Ms. Hnyp had elected the commuted value option as opposed to a monthly pension, she would have been entitled to an additional lump sum amount $1,021 as of July 31, 2011 as a result of applying the grow-in rules under the Ontario Pension Benefits Act. Notionally, this additional lump sum is actuarially equivalent to increasing Ms. Hnyp’s monthly pension amount by $4.00 a month.”
Ms Hnyp testified that she was given the opportunity to meet with an actuary from the staff of the Superintendent about the value of the offer and that the Superintendent’s actuary advised her that he had no reason to disagree with the estimate provided by Imperial Oil.
Ms Hnyp confirmed that the Superintendent’s counsel told Ms Hnyp that the Superintendent would be withdrawing the NOID if Imperial Oil withdrew the hearing request. The Superintendent through his counsel also advised Ms Hnyp to contact the Tribunal to participate in a pending pre-hearing telephone conference if she had any concerns. The Superintendent had informed Imperial Oil prior to the mailing of its cheque to Ms Hnyp that the Superintendent would be providing notice to Ms Hnyp of the intended withdrawal of the hearing request and the NOID.
Subsequently Ms Hnyp filed an Application for Party Status which, following the motion hearing, led to the Motion Decision granting Ms Hnyp party status on condition that the hearing proceed in accordance with the following two stage process:
“(a) at stage one the Tribunal will decide if it is prepared to exercise its discretion under the Act to order a partial wind-up of the Plan with respect to Ms. Hnyp’s interest in the Plan. This stage will proceed under the assumption, which will be without prejudice to the positions Imperial Oil or the Superintendent may take on the issue at stage two if it is required, that the conditions under the Act to a partial Plan wind-up order of the Superintendent or the Tribunal exist; and
(b) at stage two, which would proceed only if the Tribunal is prepared to expense its discretion to order a partial plan wind-up at stage one, the Tribunal will decide whether conditions to such a partial wind-up of the plan exist under section 69(1)(d) or section 69(1)(e) of the Act.”
The Tribunal’s order issued in the Motion Decision also declared that the Superintendent did not have the discretion to withdraw the NOID and that the Tribunal was not prepared at that preliminary stage of the proceeding to grant a request for an order that the Superintendent be directed to refrain from making his intended decision indicated in the NOID proposing to require a partial withdrawal of the Plan under section 69(1)(d) or section 69(1)(e) of the Act.
Ms Hnyp, who is currently receiving a reduced pension from the Plan, has continued to refuse to cash the cheque sent to her by Imperial Oil in August, 2011. She is seeking to have the $4.00 per month estimated amount added to her monthly pension (rather than receiving a commuted value cheque payment from Imperial Oil) in respect of the grow-in benefits she would have if the Plan were partially wound up.
Mr. MacIntyre stated in his affidavit that the terms of the Plan would not permit such a payment without an amendment to the Plan by resolution of Imperial Oil’s Board of Directors and that such an amendment would be inordinately expensive to implement and administer in contrast to Imperial Oil’s tender of the full amount of the grow-in plus interest by way of commuted value cheque. Mr. MacIntyre’s supplementary affidavit provided a further explanation of the complexity and potential costs involved in structuring an amendment to provide for the additional payment to Ms Hnyp to be made directly from the Plan having regard to applicable legislation and to the current Plan text.
Imperial Oil presented at the hearing a letter from its counsel to Ms Hnyp dated December 6th, 2011 attaching a further letter from Mr. Vettese of Morneau Shepell to Mr. MacIntyre dated December 5, 2011. In the December 6th letter Imperial Oil’s counsel stated that while Imperial Oil does not accept that Ms Hnyp would have any entitlement to any ad hoc increases in respect of potential grow-in benefits, they asked the plan actuary to provide a calculation respecting the potential value of a commuted lump sum payment taking into account possible voluntary ad hoc increases by Imperial Oil reflected in Ms Hnyp’s written submissions to the Tribunal. The letter indicated that, inclusive of updated interest and such ad hoc increases, the total commuted value offered to Ms Hnyp would be $1,099 based on the following statement in the second paragraph of the December 5, 2011 letter from Mr. Vettese:
“In our letter of September 24, 2011, we noted that if a partial wind up had occurred and Ms. Hnyp had elected the commuted value option as opposed to a monthly pension, she would have been entitled to an additional lump sum amount $1,021 as of July 31, 2011 as a result of applying the grow-in rules under the Ontario Pension Benefit Act. As of December 31, 2011, this additional lump sum is estimated to be $1,038. Notionally, this additional lump sum is estimated to increase Ms. Hnyp’s monthly pension amount by $4.00 a month. If we assume that this $4.00 a month pension was subject to future ad hoc pension increases equal to 50% of the cumulative change in CPI every five years, the present value of this additional pension at December 31, 2011 is estimated to be $1,099.”
The covering letter from Imperial Oil’s counsel indicated that in a “final effort to resolve this matter prior to the hearing on Friday, December 9, 2011, Imperial Oil is prepared to offer a cheque in that amount ($1,099) to resolve this matter without necessity of a formal hearing on the merits”. Imperial Oil confirmed that if its position on the hearing is upheld and the Tribunal decides not to exercise its discretion to order a partial Plan wind-up the offer to Ms Hnyp would remain irrevocable and not be withdrawn.
Ms Hnyp stated at the hearing that she does not wish to accept the offer of $1,099. She agreed in her testimony that she accepted Mr. MacIntyre’s testimony that the granting of ad hoc improvements to pension benefits under the Plan by Imperial Oil was voluntary and not legally required. She further acknowledged that based on the limited impact of inflation over the past several years the estimate by Imperial Oil of hypothetical future ad hoc increases based on 50% of the cumulative change in CPI every five years was probably generous. However, she expressed in her presentation to the Tribunal a strong preference that any payments made to her come from the Plan as enhanced pension rather than be pre-paid in a lump sum directly by Imperial Oil. Accordingly, she submitted that a partial wind-up of the Plan was required in order that any additional entitlements to her be paid from the Plan rather than as a lump sum by Imperial Oil outside of the Plan.
Issue and the Law
The issue at this stage one of the proceeding, as ordered by the Tribunal in the Motion Decision is as follows:
“Is the Tribunal prepared to exercise its discretion under the Act to order a partial wind-up of the Plan with respect to Ms Hnyp’s interest in the Plan, assuming without prejudice that the conditions exist under section 69(1)(d) or section 69(1)(e) of the Act for partial wind-up order of the Superintendent for the Tribunal?”
For the following reasons we have decided that we are not prepared to exercise our discretion to order a partial wind-up of the Plan with respect to Ms Hnyp’s interest. Accordingly, the Tribunal will issue an order under section 89(9) of the Act directing the Superintendent not to exercise his discretion under the Act to order a partial wind-up of the Plan with respect to Ms Hnyp’s interest.
Section 89(9) of the Act clearly puts the Tribunal in the Superintendent’s shoes with respect to whether to carry out a Notice of Intended Decision:
“at or after the Hearing, the Tribunal by order may direct the Superintendent to make or refrain from making the intended decision indicated in the Notice and to take such action as the Tribunal considers the Superintendent ought to take in accordance with this Act and the regulations, and for such purposes, the Tribunal may substitute its opinion for that of the Superintendent.”
The existence of the discretion of the Superintendent to order or refrain from ordering a full or partial wind-up under the Act was accepted by Imperial Oil and the Superintendent and was not disputed by Ms Hnyp. That discretion was recognized by previous decisions of the Tribunal and of its predecessor, the Pension Commission of Ontario [which are briefly discussed below] (see Imperial Oil Limited v. Ontario (Superintendent of Financial Services), 2002 for Carswell Ont 4800, 35CCPE 221 (the “2002 Imperial Oil Decision); Sutton v. Ontario (Superintendent of Financial Services), (6 September 2005) Decision No. P0245-2004-2 at pages 4-5 (Financial Services Tribunal) (the “Sutton Decision”) and Imperial Oil Ltd. v. Ontario (Superintendent of Pensions) (1996), 15CCPP 31(Pension Commission of Ontario) (the “1996 Imperial Oil Decision”).
The Superintendent’s authority to order a partial wind up is discretionary and the Superintendent “can properly weigh the equities in the balance in the exercise of that discretion.” (see the 2002 Imperial Oil decision at para. 22)
As noted in the Sutton Decision, the scope of the Superintendent’s discretion permits him to refrain from ordering a wind up even if the statutory criteria and factual basis for doing so are otherwise met so as to give him the jurisdiction to order a wind-up:
“It is clear from the opening words of s. 69(1), “[t]the Superintendent by order may require the wind-up of a pension plan….”, that the mere fact that a factual situation described in one of the subsections of s. 69 has occurred does not oblige the Superintendent to act. The question arises whether the occurrence of one of the enumerated factual situations in s. 69 creates a presumption in favour of ordering a wind-up, imposing an onus upon the Superintendent to justify a refusal to do so. We conclude that the section does no more than confer jurisdiction to act upon the Superintendent when one of the listed factual situations occurs, and possibly to impose a duty to consider whether to exercise that jurisdiction.” (see pages 4-5 of the Sutton Decision)
“… the fact that there might be immediate beneficial consequences to an employer or to employees resulting from a declaration of a wind-up does not require the Superintendent to order a wind-up every time he or she has jurisdiction to do so under the PBA. Otherwise, the discretion apparently conferred upon the Superintendent by s. 69 would in practice be removed in most cases. In general, the Superintendent should be exercising his or her discretion in such a way as to best promote the policy of ensuring, to the extent possible under the PBA, that employees under pension plans will be able to enjoy their anticipated benefits upon retirement.” (see page 6 of the Sutton Decision)
Accordingly, the Tribunal must decide whether this is a proper case to exercise its discretion to direct the Superintendent to refrain from making the intended decision indicated in the Superintendent’s NOID. In this context we are cognizant of (but not bound by) the Superintendent’s position a the hearing that a partial wind-up with respect only to Ms Hnyp’s interest would be inappropriate based on the current fact situation.
We will now address various arguments made by the parties as to why the Tribunal should or should not exercise its discretion to order a partial wind-up of the Plan.
De minimis amount
In the Motion Decision the Tribunal accepted the Superintendent’s argument that in the context of the preliminary issue of granting a person party status, there is no de minimis exception if that person nevertheless had a direct interest in the outcome of a proceeding. However, we agree with the positions of the Superintendent and Imperial Oil at the hearing of this matter that a de minimis interest can and should be considered at the hearing stage of the proceeding when the Tribunal is determining whether it should exercise its discretion in favour of a partial wind-up having particular regard to the exceptionally small amount involved and the uncertainty as to the amount of additional pension Ms Hnyp would have received during her lifetime. In any event, as addressed below, we are satisfied that Ms Hnyp has been offered the equivalent value of any additional benefits she would have received if a partial wind-up had been ordered.
Offer of Full Commuted Value
The offer to Ms Hnyp from Imperial Oil in September 2011 was to pay her an additional lump sum amount of $1,021 as at July 31, 2011. That amount was based on the estimated additional monthly pension she would have been entitled to receive as a result of the grow-in rules under the Act if there were a partial plan wind-up. As at December 31, 2011, the additional lump sum, increased by interest was estimated to be $1038 which would increase Ms Hnyp’s monthly pension amount by about $4 per month. The revised offer presented by Imperial Oil through its counsel on December 6, 2011 proposed to increase the present value of additional pension at December 31, 2011 to $1099 on the assumption that the estimated $4 per month additional pension would be subject to future ad hoc pension increases equal to 50% of the cumulative change in CPI every 5 years. As noted above, Ms Hnyp did not dispute the estimated amounts and acknowledged that they were “directionally” correct and appeared to include a generous estimate of ad hoc increases. She also acknowledged that granting ad hoc increases under the Plan was uncertain and, as stated by Mr. MacIntyre, were entirely voluntary.
Ms Hnyp however argued that in her view the payment in a lump sum amount from Imperial Oil was not necessarily of equivalent value to a periodic payment from the Plan. She did not present any evidence to support her view in contrast to the evidence presented by Imperial Oil. In addition, we would note that if payment was made from the Plan - requiring a potentially challenging and complex amendment as explained in Mr. MacIntyre’s affidavits - there would be no certainty that Ms Hnyp would receive any ad hoc increase which Imperial Oil decided to grant in its discretion by way of any future Plan amendment. Furthermore, as noted above, Ms Hnyp acknowledged that the estimated rate of ad hoc increase for purposes of the offer made by Imperial Oil appear to be generous.
The Superintendent, in the interest of fairness, drew to the attention of the Tribunal a very recent decision of the Tribunal released a couple of days before the hearing on December 7, 2011 in R. Boys v. Superintendent of Financial Services and Shoppers Drug Mart Corporation, FST Decision No. P0457-2011-2 (the “Boys Decision”). The Boys Decision recognizes that a lump sum payment (in that case not involving an ad hoc benefit aspect) paid directly by a plan sponsor in lieu of an enhanced additional pension amount paid from a pension plan might have less value than a lump sum commuted benefit because of the current tax impact of a lump sum payment in contrast to the ability to defer tax if payment is made from a plan. The Boys Decision did not involve any adjustment for a potential voluntary ad hoc increase that otherwise would be quite uncertain to be granted in an amount that is entirely speculative. Furthermore, the amount involved in the Boys Decision was clearly far more substantial, and a much higher percentage of the individual’s pension, than was the case with respect to the enhanced pension sought by Ms Hnyp.
The Tribunal is not satisfied that it should exercise its discretion in the present case having regard to the enhanced additional lump sum offer made by Imperial Oil. There is no clear evidence that the lump sum offer did not have a value equivalent to the potential periodic additional pension Ms Hnyp would gain under the Plan by virtue of the grow-in provisions of the Act. Instead, the evidence indicates an equivalent value has been offered irrevocably by Imperial Oil.
In the 1996 Imperial Oil Decision the Pension Commission concluded that if it had been proven that “benefits equivalent to those provided under section 74” had been given, the Commission would have been prepared to exercise its discretion and not order the partial wind-up as the Plan members would have suffered no prejudice. In this case Ms Hnyp has been provided with “benefits equivalent to those provided under section 74” of the Act (the “grow-in provision”). In any event, any differential is likely to be extremely limited and not sufficient to justify the requested exercise of the Tribunal’s discretion.
We also agree with the submission of the Superintendent that the Act does not define the word “benefit”. It does define the term “pension benefit” as meaning the aggregate monthly, annual or other periodic amounts payable to a member or former member to which the member or former member will become entitled under the plan, for the lifetime of the member or former member. In addition, the Act defines the term “commuted value” as meaning the value calculated in the prescribed manner and as of a fixed date of the pension, a deferred pension, pension benefit or an ancillary benefit. Given the context of those definitions, we agree with the Superintendent that the term “benefit” under the Act appears to mean an amount and not a transfer right. The Pension Commission in the 1996 Imperial Oil decision did not indicate that an enhanced pension was the only option by which a former member could receive the equivalent benefits. The choice of words was that equivalent benefits were “given” which implies a variety of payment options.
The Sutton Decision of the Tribunal provides additional guidance as to when the Tribunal exercises discretion to order, or decline to order a partial wind-up even though the grounds for a partial wind-up factually exist (in the present case by virtue of the assumption on which stage one of the hearing proceeded) under clause 69(1)(a) of the Act in that case a cessation of employer contributions to the pension fund. In the Sutton matter the Tribunal declined to exercise its discretion to make such an order stating that “in general, the Superintendent should be exercising his/her discretion in such a way as to best promote the policy of maturing to the extent possible under the PBA, that employees under pension plans will be able to enjoy their anticipated benefits upon retirement”. We are satisfied in this case that Ms Hnyp is receiving her anticipated benefits upon retirement and the policy objective of the Act is being met.
Superintendent Would Not Have Issued the NOID in the General Circumstances
The Superintendent advised the Tribunal and the parties that he would not have issued a NOID for partial wind-up if the current circumstances had presented themselves to the Superintendent in January 2011. The position of the Superintendent was that it has never issued a Notice of Proposal or NOID in the past to wind-up a plan in the circumstances where the affected members receive the equivalent of grow-in benefits. That statement of the Superintendent is consistent with the experience of the members of the panel.
The Tribunal is not bound by any action or omission taken by the Superintendent. Nevertheless, the fact that the Superintendent indicates there would not have been a NOID issued if the current circumstances existed in January 2011 reflecting the Superintendent’s level of satisfaction that the policy objective of the Act has been met on the facts, is a factor to be taken into account by the Tribunal in deciding whether to exercise its discretion.
Cost of Plan Amendment
Counsel for Imperial Oil made submissions as to the relevance of the potential significant costs to implement and administer such an amendment to the Plan to provide for payment to Ms Hnyp of the requested additional benefit as a factor in the exercise of the Tribunal’s discretion to order a special Plan wind-up. The Tribunal accepts Mr. MacIntyre’s evidence that such an amendment would be complex and costly to draft and administer. We are not convinced that the cost to Imperial Oil of adopting such an amendment, if the partial Plan wind-up otherwise were to be ordered, is a significant factor in the exercise of the Tribunal’s discretion; however, in view of the decision reached by us based on other factors it is unnecessary to enter into any further consideration of the relevance of cost to Imperial Oil of such an amendment.
Impact of this Proceeding on any Former Members Other than Ms Hnyp
As acknowledged by Ms Hnyp, the Tribunal concluded in the Motion Decision, on the facts noted therein, that this proceeding cannot potentially benefit any former members of the Plan, other than Ms Hnyp, and that any future circumstances that may arise as a result of this proceeding will have to come before the Superintendent based on particular facts that exist in such a case. Accordingly, for purposes of this particular matter the fact that other former members may have received less than their hypothetical full value grow-in entitlement and the impact on other members affected by a future event are not factors to be considered by the Tribunal in deciding whether there are discretionary reasons not to order a partial wind-up with respect to Ms Hnyp’s interest in the Plan.
Costs
Imperial Oil requested in its written submissions an order for its costs of this hearing as against Ms Hnyp. While Imperial Oil has been successful at this hearing, the Tribunal, after considering the criteria for an award of costs in its discretion under Rule 45 of its Rules of Practice and Procedure is not prepared to grant that request. Ms Hnyp’s conduct in this matter from the time she applied for party status has been timely and appropriate. She did not engage in any conduct that was unreasonable, frivolous or vexatious.
Order
The Tribunal directs the Superintendent to refrain from exercising its discretion to order a partial wind-up of the Plan under section 69(1)(d) and 69(1)(e) of the Act with respect to Ms Hnyp’s interest in the Plan and not carry out the NOID with respect to her interest.
DATED at the City of Toronto, this 10th day of February, 2012.
“John M. Solursh” Mr. John M. Solursh,
Chair of the Tribunal and the Panel
“Jennifer Brown” Ms Jennifer Brown,
Member of the Tribunal and of the Panel
“Patrick Longhurst” Mr. Patrick Longhurst,
Member of the Tribunal and of the Panel