{"id":17730,"date":"2019-12-05T09:15:54","date_gmt":"2019-12-05T14:15:54","guid":{"rendered":"https:\/\/www.benefitscanada.com\/news\/alberta-court-orders-pension-regulator-to-pay-retiree-267000-for-negligent-misrepresentation-of-benefits-139902"},"modified":"2019-12-05T09:15:54","modified_gmt":"2019-12-05T14:15:54","slug":"alberta-pension-regulator-ordered-to-pay-retiree-267k-for-misrepresentation-of-benefits","status":"publish","type":"post","link":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/2019\/12\/05\/alberta-pension-regulator-ordered-to-pay-retiree-267k-for-misrepresentation-of-benefits\/","title":{"rendered":"Alberta pension regulator ordered to pay retiree $267K for misrepresentation of benefits"},"content":{"rendered":"
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Julius Melnitzer<\/span> | December 5, 2019<\/p>\n

The Alberta Court of Appeal has upheld a $267,017 award to a pensioner for negligent misrepresentation after the Alberta Pensions Services Corp. provided mistaken estimates of the pensioner\u2019s retirement benefits.<\/p>\n

But the lawyer for Dr. William Calder and his wife says the ruling, which also validated a change in the ASPC\u2019s interpretation of the governing legislation,  doesn\u2019t adequately cover the losses of the six couples she represented in the Calder suit and whose damages have yet to be negotiated with the APSC.<\/p>\n

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\u201cDr. Calder\u2019s damages would have been quite close to $1.5 million had the court upheld the interpretation of the Public Sector Pensions Plan Act that the APSC had applied for almost two decades,\u201d says Rita Richardson, founder of Richardson Law Office in Calgary. \u201cI\u2019ve never seen anything like this before, where the change in interpretation that affected so many people took place so many years after the original one had been established and consistently applied.\u201d<\/p>\n

Richard says about 25 pensioners were affected by the change in interpretation, with 23 seeing reductions in their pensions. \u201cAnd there are about 100 employees who will be similarly affected when they retire,\u201d she adds.<\/p>\n

The case revolved around the PSPPA, which split the public service pension regime for managers into two separate plans: The Public Service Management Closed Membership Pension Plan, for those who had ceased employment before Aug. 1, 1992, and the Management Employees Pension Plan, for those who continued employment as managers thereafter.<\/p>\n

Calder didn\u2019t fit neatly into either plan. As a former manager from 1978 to 1986, he was a deemed member of the closed plan, but he returned to work as a manager in 1995.<\/p>\n

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The PSPPA provided that returning managers would be members of both plans, with benefits based on pensionable service before Aug. 1, 1992, and a proviso that pensionable service after that date \u201cmay be considered\u201d in calculating benefits.<\/p>\n

In 2009, APSC interpreted the proviso to include any salary earned after Aug. 1, 1992. In 2010, the ASPC assured Calder that this interpretation, which entitled him to a monthly pension of about $8,000, would rule. Based on this information, Calder retired in 2011 and began collecting his pension.<\/p>\n

In 2012, APSC settled on a new interpretation that limited the calculation of benefits to salary earned between Aug. 1, 1992 and Jan. 1, 1994. Two years later, the APSC revised its calculation of Calder\u2019s benefits and reduced his monthly pension to about $2,000.<\/p>\n

The trial judge ruled that the 2012 interpretation was the correct one. In his view, the 2009 interpretation would lead to an absurdity that he described as \u201cdouble-dipping.\u201d<\/p>\n

Read: B.C. benefits trust successful in double-dipping case<\/a><\/strong><\/p>\n

The Court of Appeal agreed. \u201cThis is what the trial judge described as double-dipping: the returning manager gets the benefit of a higher salary earned recently, but still has that salary adjusted [for the cost-of-living] on the assumption that it was earned at the old plan termination date,\u201d the court wrote in its judgment. \u201cThe absurdity of this interpretation is heightened by contrast to the plight of management employees who worked continuously for Alberta. Having no access to the cost-of-living adjustment double-dip and other old plan benefits, they would receive far smaller pensions than returning managers.\u201d<\/p>\n

As the Court of Appeal saw it, the trial judge was also correct in holding that APSC wasn\u2019t precluded from reinterpreting the legislation, which he had explained as follows: \u201c. . .  neither the law of trusts nor the law of contract can be stretched so as to compel the APSC to continue indefinitely to apply a statutory interpretation that has been determined to be incorrect, and to create absurd results. Such an obligation cannot reasonably be interpreted as a term of employment. Nor can it be properly characterized as a trust obligation owed by the administrator. Nor can it be the foundation of a \u2018vested\u2019 right as argued by the plaintiffs.\u201d<\/p>\n

According to Richardson, this ruling treats public pensioners differently from private pensioners. \u201cIt\u2019s an unfortunate distinction that turns public pensioners into second-class citizens,\u201d she says.<\/p>\n

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However that may be, the Court of Appeal did agree with the trial judge that the ASPC and the province were liable for negligent misrepresentation.<\/p>\n

But the trial judge had been correct in ruling that Calder wasn\u2019t entitled to be put in the position he would have enjoyed had the misrepresentation been true; rather, he was entitled only \u201cto restitution for the damages flowing from the communication of inaccurate information,\u201d which included Calder\u2019s ability to exercise other options when planning his retirement and making spending decision.<\/p>\n

In an email to Benefits Canada<\/em>, Cara Alexander Brown, APSC\u2019s manager of communications, confirmed that neither party has sought leave to appeal from the Supreme Court of Canada. \u201cAs there are still other members of the Calder class, as well as others outside the class who were similarly affected with whom we have not reached a settlement, we cannot comment on this matter at this time,\u201d she added.<\/p>\n

Read: A 2018 roundup of the top legal cases in the benefits industry<\/a><\/strong><\/p>\n

Read the full article at BenefitsCanada.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Julius Melnitzer | December 5, 2019 The Alberta Court of Appeal has upheld a $267,017 award to a pensioner for negligent misrepresentation after the Alberta Pensions Services Corp. provided mistaken estimates of the pensioner\u2019s retirement benefits....<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/17730"}],"collection":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/comments?post=17730"}],"version-history":[{"count":0,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/17730\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=17730"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=17730"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=17730"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}