Pensions, Benefits & Executive Compensation Newsletter – January 2020

Welcome to the 26th issue of the Blakes Pensions, Benefits & Executive Compensation Newsletter. This newsletter provides a summary of recent jurisprudential developments that affect pensions and benefits and is not intended to be legal advice.

IN THIS ISSUE

BENEFICIARY DESIGNATIONS

Nickel v. Gerbrandt, 2019 SKQB 117 FAMILY LAW

Meloche v. Meloche, 2019 ONSC 6143 Lux v. Lux, 2019 ABCA 454 PRESUMPTION OF LIFE

Threlfall v. Carleton University, 2019 SCC 50 INTERPRETATION OF PENSION PLAN TERMS

Lamarche v. Canada (Attorney General), 2019 FC 1303 Jost v. Canada (Attorney General), 2019 FC 1356 Integram Windsor Seating division of Magna Seating Inc. v. Unifor Local 444, 2019 CanLII 114882 (ON LA) VESTING DURING THE REASONABLE NOTICE PERIOD

O'Reilly v. IMAX Corporation, 2019 ONCA 991

HEALTH AND WELFARE BENEFITS

Markham Stouffville Hospital (Uxbridge Site) v. CUPE, Local 1999, 2019 ONSC 5373 BENEFICIARY DESIGNATIONS

Nickel v. Gerbrandt, 2019 SKQB 117

Mr. Gerbrandt was a former employee of the Saskatchewan Wheat Pool. Before separating in 1998, Mr. Gerbrandt lived in a common law relationship with Ms. Nickel for 15 years. During this time, Mr. Gerbrandt named Ms. Nickel as the beneficiary of his pension plan and did so in the manner provided for in the plan. Mr. Gerbrandt died in 2018. Before his death, he did not rescind, revoke or change the designation in the manner required by the plan. Instead, Mr. Gerbrandt executed a holographic will, giving his daughter "any money owed to [him] from all pension plans." Both Ms. Nickel and Mr. Gerbrandt's daughter claimed an entitlement to the pre-retirement death benefit.

The Saskatchewan Court of Queen's Bench (Saskatchewan Court) held that, under section 67(2) of the Saskatchewan Pension Benefits Act, 1992 (Saskatchewan PBA), a change of a beneficiary designation must be made using the form prescribed by the pension plan and in the manner specified in the plan. Section 67(2) of the Saskatchewan PBA states that "[a] member or former member may from time to time alter or revoke a designation made pursuant to a plan, but that alteration or revocation may be made only in the manner specified in the plan." The Saskatchewan Court held that the correct interpretation of this provision dictates that the beneficiary designated in the pension document cannot be altered by a contrary intention expressed in the deceased member's will.

As Mr. Gerbrandt did not alter the beneficiary designation in the manner required by the plan, the Saskatchewan Court held that the holographic will was not a valid change to the beneficiary designation. The Saskatchewan Court ordered that the pension plan pay the pre-retirement death benefit to Ms. Nickel.

Saskatchewan Court of Queen's Bench Decision

FAMILY LAW

Meloche v. Meloche, 2019 ONSC 6143

Mr. Meloche and Ms. Meloche (Parties) separated in 2017 after 30 years of marriage. Two years earlier, Ms. Meloche retired and elected a joint pension with a 60 per cent survivor benefit. Mr. Meloche had Amyotrophic Lateral Sclerosis and was unable to work. He received full-time care and resided at an assisted living facility. While the Parties agreed that 48.99 per cent of Ms. Meloche's pension should be paid to Mr. Meloche for the rest of his life, Mr. Meloche brought a motion requesting that the plan administrator also pay to his estate a portion of Ms. Meloche's pension benefit for the rest of her life, should he predecease her.

The Ontario Superior Court of Justice (Superior Court) held that the Ontario Pension Benefits Act (Ontario PBA) explicitly precludes such payments from being made to Mr. Meloche's estate after his death. In reaching its finding, the Superior Court noted that the applicable provisions of the Ontario PBA do not suggest that a monthly split of pension benefits is an asset that can be gifted or bequeathed, nor do the provisions authorize the payment of a portion of a pension to the estate of the spouse. Instead, the applicable provisions in the Ontario PBA direct divided pension payments only to the 'eligible spouse' and prohibit any other divided...