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PRIVATE PENSION PLANS - Pension benefits - Calculation

Thursday, April 16, 2020 @ 8:37 AM  


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Appeal by the representative plaintiff from the summary judgment dismissing the class action brought on behalf of 35,000 retirees who were beneficiaries of the respondents’ pension plan. The plan provided that to determine the annual pension increase, the Pension Index was to be rounded to the nearest whole number. The motion judge found the respondents were entitled to round up the annual percentage increase in the Consumer Price Index to two decimal points, to 1.49 per cent, which rounded to a 1 per cent increase for the 2017 pension. The respondents had used the two-decimal rounding policy, rather than the Statistics Canada one-decimal policy, since 1998.

HELD: Appeal allowed. The contract provided that both the annual percentage increase and the Consumer Price Index were to be determined by Statistics Canada. The words in the plan required the parties to adopt the Statistics Canada policy. The plan did not provide that Statistics Canada determined only the increase in the Consumer Price Index and the respondents could adopt a different rounding policy to determine the Pension Index. The motion judge ignored the uncontradicted evidence that using the Statistics Canada one-decimal rounding policy would frequently produce a three-decimal figure in the calculation of the annual percentage increase for recently retired pensioners, and that the two-decimal rounding provision in the plan would then apply and had meaning. The motion judge’s failure to apply the evidence to the interpretation of the plan amounted to a palpable and overriding error of fact. Summary judgment was awarded to the appellant based on a Consumer Price Index of 1.5 per cent, and the resulting two per cent increase for 2017 pension.

Austin v. Bell Canada, [2020] O.J. No. 750, Ontario Court of Appeal, J.C. MacPherson, R.J. Sharpe and M. Jamal JJ.A., February 21, 2020. Digest No. TLD-April132020006