Pensions, Benefits & Executive Compensation Newsletter ' April 2020

• Published date: 20 May 2020
• Author: Blakes Pensions, Benefits & Executive Compensation Group
• Subject Matter: Employment and HR, Retirement, Superannuation & Pensions, Health & Safety, Employee Benefits & Compensation
• Law Firm: Blake, Cassels & Graydon LLP

Welcome to the 27^th 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

• Earl v. McAllister, 2019 ONSC 7288

INTERPRETATION OF PENSION PLAN TERMS

• Austin v. Bell Canada, 2020 ONCA 142

FAMILY LAW

• Kraft v. Kraft, 2020 BCSC 283
• Miaskowski v. MacIntyre, 2020 ONCA 178

JURISDICTION OF A PENSION PLAN

• Canada (Attorney General) v. Northern Inter-Tribal Health Authority Inc., 2020 FCA 63

COLLECTIVE BARGAINING

• Teamsters Canada Rail Conference, Division 660 v Bombardier Transportation - North America, 2020 CanLII 12641 (ON LRB

HEALTH AND WELFARE BENEFITS

• Hutton v. The Manufacturers Life Insurance Company (Manulife Financial), 2019 ONCA 975

BENEFICIARY DESIGNATIONS

Earl v. McAllister, 2019 ONSC 7288

Leo McAllister (Deceased) died after a battle with cancer and left behind two minor children (Boys). Tammy McAllister (Applicant), the former spouse of the Deceased, brought an application for support on behalf of the Boys against the Deceased's surviving spouse, Barbara McAllister (Respondent). At the date of his death, the Deceased held entitlements under two union-sponsored pension plans. The Respondent was the designated beneficiary for purposes of the first pension plan (Pension 1). The Deceased signed the consents required to transfer the designated beneficiaries in Pension 1 from the Respondent to the Boys, and, while these were mailed out, the forms were never received by the plan administrator. The second pension plan (Pension 2) provided a pre-retirement surviving spouse a lump sum payment of C$88,177.40. The Respondent, as the Deceased's surviving spouse, elected to take the payment by way of monthly payments of C$376 for life.

The Applicant submitted that the evidence was that the Deceased intended to change the beneficiaries for both Pension 1 and Pension 2, and that the entire value of the Deceased's estate'including benefits accumulated under Pension 1 and Pension 2'go to the Boys. The Respondent's evidence was that the Deceased intended only that the Boys receive the benefit of his entitlements under Pension 1, as it was strictly the beneficiary designation form for Pension 1 that he signed and sent to the plan administrator.

The issue before the Ontario Superior Court of Justice (O.N. Superior Court) was whether the surviving spouse's benefit under Pension 2 should be included in the assets of the estate under subsection 72(1)(g) of the Ontario Succession Law Reform Act (SLRA) for the purposes of determining dependent support.

The O.N. Superior Court reviewed the relevant case law in its analysis, including Cotnam v. Rousseau, 2018 ONSC 216 (Cotnam), which was discussed in our July 2018 Blakes: Pensions Newsletter. In Cotnam, the O.N. Superior Court determined that spousal priority for a pre-retirement death benefit in section 28 of the Ontario Pension Benefits Act did not shield pre-retirement death benefits paid to a spouse from being clawed back under subsection 72(1)(g) of the SLRA. In the case at hand, the O.N. Superior Court did not agree with the Cotnam decision. The Court concluded that subsection 72(1)(g) of the SLRA is clear in its wording and only includes amounts payable pursuant to a designation of beneficiary. The pre-retirement surviving spouse benefit payable under Pension 2 is not paid pursuant to a designation of beneficiary, but rather to the Respondent in her capacity as the surviving spouse. Therefore, the O.N. Superior Court held that the pre-retirement death benefit payable to the Respondent under Pension 2 was not to be included in the Deceased's assets for purposes of the relief application under the SLRA.

Ontario Superior Court of Justice Decision

INTERPRETATION OF PENSION PLAN TERMS

Austin v Bell Canada, 2020 ONCA 142

This class action proceeding involved consideration of a single provision in the Bell Canada Pension Plan (Plan). The sole issue before the Ontario Court of Appeal (O.N. Appeal Court) was the proper calculation of the cost-of-living adjustment under the Plan and, accordingly, whether Bell Canada (Administrator) was entitled to round the Consumer Price Index (CPI) used to calculate annual cost of living increases to the nearest two decimal points. The difference to the class members as a result of the rounding was over C$10-million for the first year and estimated that it could be a larger amount over the long-term.

A long-time employee of the Administrator (Appellant) issued a class action on behalf of approximately 35,000 pensioners who were beneficiaries of the Plan...