IN THE MATTER OF the Pension Benefits Act, R.S.O. 1990,c. P.8, as amended (the “PBA”)
AND IN THE MATTER OF a Proposal of the Superintendent of Financial Services to Make an Order under section 87(2)(a) of the PBA relating to the Coats Canada Employees’ Pension Plan, Registration Number 0288563.
Mr. John Frank Harper
24 Elizabeth Way
Coats & Clark Canada Inc., a division of Coats Canada
6060 Burnside Court, Unit #2
Mississauga, ON L5T 2T5
Human Resources Manager
Employer and Administrator
NOTICE OF PROPOSAL
I PROPOSE TO MAKE AN ORDER in respect of the Coats Canada Employees’ Pension Plan, Registration Number 0288563, (the “Plan”) under section 87(2)(a) of the PBA directing the Administrator of the Plan to pay from the pension fund of the Plan certain entitlements to John Frank Harper, a former member of the Plan (the “Applicant”) as required by section 2 of Article XIII of the plan text for the J & P Plan (as defined below) as it read on March 30, 1987.
- The Applicant was a member of the J. & P. Coats (Canada) Inc. Pension Plan (the “J & P Plan”), a contributory defined benefit pension plan, from 1979 to 1987. Prior to 1979 he was employed in the UK and he started to accrue credited service with the Coats Patons Superannuation Fund (1978) in the UK on April 1, 1978.
- In 1979 the Applicant’s employment was transferred to Montreal, Quebec, and he became an employee of Jaeger Fashions of Canada Limited, later known as Jaeger (Canada) Inc. (“Jaeger”) which had elected to participate in and been admitted to the J & P Plan.
- The Applicant’s Credited Service, as defined in the J & P Plan commenced April 1, 1978 and ended when the Applicant left the employ of Jaeger on March 30, 1987 (the “Applicant’s Credited Service Period”).
- The J & P Plan was registered in Quebec during the Applicant’s Credited Service Period, and all of the Applicant’s Credited Service in the J & P Plan was earned while he was employed in Quebec.
- The J & P Plan was amended and restated to January 1, 1978. In 1978 Article XII of the J & P Plan provided that a member has attained vested status after he has completed 10 years of Continuous Employment or 10 years of membership in the Plan, whichever shall first occur. The provisions in Article XII were not changed during the Applicant’s Credited Service Period.
- In 1978 Article XIII of the J & P Plan provided that if a Member has ceased to be employed by the Employers, he shall be entitled to the benefits in respect of Required Contributions as described in Section 2 of this Article. Section 2 provided that if the Member has not attained vested status in accordance with Article XII (Vesting) he is entitled to receive a lump sum payment equal to the total of his Required Contributions with Credited Interest. These provisions in Article XIII were not changed during the Applicant’s Credited Service Period.
- Section 35 of the Supplemental Pension Plans Act R.S.Q. 1977 c. R.-17 provided as follows:
35. A plan shall contractually provide that upon termination of his employment or upon termination of his membership in the plan, an employee who is not entitled to the deferred pension prescribed in section 31 is at least entitled to either the reimbursement of the aggregate of the contributions, other than voluntary additional contributions, made by him since the qualification date or the deferred annuity arising from such contributions.
- Section 35 of the Supplemental Pension Plans Act R.S.Q. 1977 c. R-17 was not amended during the Applicant’s Credited Service Period.
- Under the terms of the Memorandum of Reciprocal Agreement entered into by the Pension Commission of Ontario, the Régie des rentes du Québec and other pension authorities of other provinces, the major authority as defined therein, exercises both its own statutory functions and powers and the statutory functions and powers of each minor authority, in connection with a pension plan provided for employees in more than one jurisdiction.
- In 1995 the Pension Commission of Ontario, now the Financial Services Commission of Ontario, became the major authority for the J & P Plan, and the plan’s registration was transferred from Quebec to Ontario at that time. The Superintendent is now enforcing the provisions of the J & P Plan and the pension legislation of Quebec, as they applied to the Applicant during the Applicant’s Credited Service Period.
- The J & P Plan became known as the Pension Plan for Employees of Coats Canada Inc. Registration Number 353839, which was merged into the Pension Plan for Employees of Coats Patons, Registration Number 0288563, effective December 31, 1997.
- Effective December 31, 1997, the name of the Pension Plan for Employees of Coats Patons, Registration Number 0288563 was changed to Coats Canada Employees’ Pension Plan Registration Number 0288563 (the “Plan”).
- The Applicant had not attained vested status at the time of the termination of his employment, as he had not completed ten years of continuous employment or ten years of membership in the J & P Plan. Accordingly, on termination he was entitled to receive a lump sum payment equal to the total of his Required Contributions plus interest.
- The Applicant has stated that he has never received a lump sum from the J & P Plan or its pension fund or otherwise received a refund of the Required Contributions he made to the J & P Plan or any interest on those Required Contributions.
- The Administrator has acknowledged that the Applicant was a member of the Plan and ceased to be a member in April of 1987. The Administrator states that the Applicant’s entitlement under the Plan as of May 1987 was $17,941.80, which represented a refund of the Applicant’s Required Contributions plus interest, and that an amount of $17,941.80 was paid out of the pension fund for the Plan according to the records of the J & P Plan actuary, on May 8, 1987 (the “Payment”), although there was no indication of the nature of the benefit paid and to whom it was paid.
- The Administrator cannot prove that the Payment was made to the Applicant because the trustees’ records have not been preserved by the Administrator or the custodian. The Administrator does not know who received the Payment and has no other records that indicate that the Applicant has received any other payment from the Plan as a result of his termination from the Plan or that indicate the Applicant has released all his claims to any entitlement under the Plan.
- The Superintendent is not satisfied that the Payment was made to the Applicant and therefore cannot conclude that the terms of the J & P Plan and the pension legislation of Quebec applicable to the Applicant during and at the end of the Applicant’s Credited Service Period have been complied with.
- Such further and other reasons as may come to my attention.
YOU ARE ENTITLED TO A HEARING by the Financial Services Tribunal (the “Tribunal”) pursuant to section 89(6) of the PBA. To request a hearing, you must deliver to the Tribunal a written notice that you require a hearing, within thirty (30) days after this Notice of Proposal is served on you.*
YOUR WRITTEN NOTICE must be delivered to:
Financial Services Tribunal
5160 Yonge Street
Attention: The Registrar
FOR FURTHER INFORMATION on a Form for the written notice, please see the Tribunal website at www.fstontario.ca or contact the Registrar of the Tribunal by phone at 416- 590-7294, toll free at 1-800-668-0128, ext. 7294, or by fax at 416-226-7750.
IF YOU FAIL TO REQUEST A HEARING WITHIN THIRTY (30) DAYS, I MAY CARRY OUT THE PROPOSAL AS DESCRIBED IN THIS NOTICE.
DATED at Toronto, Ontario, this 15th day of May, 2007.
K. David Gordon
Deputy Superintendent, Pensions
Fraser Milner Casgrain LLP
1 First Canadian Place
100 King Street West
Toronto, ON M5X 1B2
Counsel to the Employer
*NOTE - Pursuant to section 112 of the PBA any Notice, Order or other document is sufficiently given, served or delivered if delivered personally or sent by regular mail and any document sent by regular mail shall be deemed to be given, served or delivered on the seventh day after the date of mailing.