Plan Members' Action Against Pension Trustees Fails

• Published date: 17 May 2022
• Subject Matter: Employment and HR, Litigation, Mediation & Arbitration, Retirement, Superannuation & Pensions, Arbitration & Dispute Resolution
• Law Firm: Fasken
• Author: Ms Tracey Cohen and J. Kendal Paul

Larkin et al v Johnson et al 2022 BCSC 603

The British Columbia Supreme Court has confirmed the limited circumstances in which a court may interfere with a discretionary decision of pension trustees.

In a Supreme Court decision pronounced on April 19, 2022, Justice Skolrood dismissed the claims of four members of the B.C. Credit Union Employee's Pension Plan (the "Plan"), a multi-employer, defined benefit plan, against the trustees of the Plan (the "Trustees"), concluding that the Trustees' discretion was properly exercised.

A. Nature of Plaintiffs' Claims against Trustees

The Plaintiffs asserted three claims (in their second amended notice of civil claim) against the Trustees. They alleged the Trustees breached their duty to act in good faith and fiduciary and statutory duties in:

(1) failing to appoint a "representative" Board of Trustees with currently employed or retired Members as Trustees (the "Board Composition Claim");

(2) failing to warn the Plaintiffs of a solvency deficiency that existed in 2015. In particular, the Plaintiffs alleged that the Trustees owed a duty to warn the members that they were contemplating benefit reductions and failed to do so (the "Duty to Warn Claim"); and

(3) resolving in March 2016 to increase the Normal Retirement Date from age 62 to age 65 in respect of accrued service after January 1, 2017 and upholding that decision despite learning of an improved solvency position of the Plan in late 2016 (the "Increase in Normal Retirement Age Claims").

B. All Claims Dismissed on a Summary Trial

The Trustees brought a summary trial application to have the entirety of the claims against them dismissed. The application was heard on November 17 to 19, 2022.

The Plaintiffs argued that the case was not suitable for determination by a summary trial on the basis that a full trial with live witnesses was necessary in order for the Judge to make the findings of fact necessary to decide the case. Justice Skolrood concluded that the case was suitable for determination on a summary trial basis. He found that apart from a general statement that credibility will be in issue, the Plaintiffs did not identify any material conflicts in the evidence nor did they point to specific facts giving rise to credibility concerns. Justice Skolrood further concluded that the minutes of the Trustees' meetings disclosed the information and materials that were before the Trustees and that informed their consideration and decision. This record was more than...