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 sections 87 and 19 of the PBA respecting a request by Mr. Oldrich Pelich relating to the Boeing Toronto, Ltd. Non-Contributory Pension Plan for Hourly Employees of the National Automobile, Aerospace Transportation and General Workers Union of Canada (CAW-Canada) Local 1967, Registration Number 210500.
Mr. Oldrich Pelich
361 West Mall
Apartment 401 W
Boeing Toronto, Ltd.
The Boeing Company
100 North Riverside Plaza, 5002-8421
Chicago IL 60606-1596
ATTENTION: Ms. Pamela A. French
Director, Global Employee Benefits
NOTICE OF PROPOSAL
I PROPOSE TO MAKE AN ORDER in respect of the Boeing Toronto, Ltd. Non-Contributory Pension Plan for Hourly Employees of the National Automobile, Aerospace Transportation and General Workers Union of Canada (CAW-Canada) Local 1967, Registration Number 0210500 (the “Plan”), requiring Boeing Toronto, Ltd. (“Boeing”) to administer the Plan in accordance with the Plan’s terms.
- Mr. Pelich commenced employment with Boeing Toronto, Ltd. and became a member of the Plan on September 15, 1969.
- Mr. Pelich commenced a medical leave in 2002 and started receiving a monthly disability benefit from the Extended Disability Benefit Plan (the “EDB Plan”) insured by Great-West Life in 2003.
- Mr. Pelich elected to retire from his employment with Boeing and applied for payment of pension benefits under the Plan effective August 1, 2005.
- Before Mr. Pelich received the requisite forms in respect of his application for pension benefits from Boeing, he was informed by Boeing that if he chose to retire, his monthly benefit from the EDB Plan would cease, and his pension benefits would begin on the same day.
- Mr. Pelich completed and returned the requisite forms to Boeing for processing and for payment of his pension benefits.
- Mr. Pelich stopped receiving his monthly disability benefit from the EDB Plan on August 1, 2005, Mr. Pelich’s retirement date.
- Mr. Pelich objected to the discontinuance of his disability benefit and after discussions with Great-West Life, his monthly disability benefit from the EDB Plan was reinstated in December 2006, retroactive to August 1, 2005.
- Boeing suspended Mr. Pelich’s pension plan benefits effective August 1, 2007, until he stops receiving the disability benefit from the EDB Plan. Boeing asked Mr. Pelich to repay the Plan the full amount of pension benefits received by him while also receiving the EDB Benefit.
- Boeing relied on Article IX, paragraph b) of the Plan in support of its position that Mr. Pelich could not receive both a pension payment from the fund and a benefit from the EDB Plan at the same time. Paragraph b) of Article IX provides in part:
- In no case shall a pension commence until the first (1st) day of the month following the cessation of any accident and sickness benefits toward which the Company has contributed by payment of premium, taxes or otherwise, other than Workers’ Compensation Benefits. (Emphasis added)
- Mr. Pelich submits his pension benefits ought not to have been discontinued.
- Article IX of the Plan does not specifically and expressly address what happens to the pension benefits of a retired member when he or she receives disability benefits from the EDB Plan after the pension has commenced. It is not clear from Article IX or any other provision in the Plan what is to occur in the event that there is a reinstatement of the disability benefit under the EDB Plan after pension benefits have commenced.
- Mr. Pelich did not commence receiving pension benefits until after his benefits under the EDB Plan had ceased. Subsequently, his benefits under the EDB Plan were reinstated after he commenced receiving pension benefits. In these circumstances, it is not clear from the Plan that Boeing can suspend Mr. Pelich’s pension benefits. Where there is ambiguity in a provision of a pension plan, courts have invoked the contra proferentum rule to interpret the wording against the drafter of the pension plan (usually the employer). In Mr. Pelich’s case the contra proferentum rule would dictate that Article IX of the Plan be interpreted in favour of Mr. Pelich.
- In suspending Mr. Pelich’s pension benefits, Boeing is not administering the Plan in accordance with the Plan terms, contrary to section 19 of the PBA. Accordingly, Mr. Pelich’s pension benefits should be reinstated, retroactive to August 1, 2007.
- Such further 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 31st day of January, 2008.
K. David Gordon
Deputy Superintendent, Pensions
Mr. Kevin J. Aselstine, FSA, FCIA
Managing Principal, Toronto
175 Bloor Street East
South Tower, Suite 1701
* 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.